If the firm were a perfect competitor, how much would its price be in the long run?
$27.90
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If an industry's Herfindahl-Hirschman Index is less than 1, the industry is likely to be
A) competitive. B) an oligopoly. C) a monopoly. D) technologically inefficient.
The long run is a period of:
A. at least one year. B. sufficient length to allow a firm to expand output by hiring additional workers. C. sufficient length to allow a firm to alter its plant size and capacity and all other factors of production. D. sufficient length to allow a firm to transform economic losses into economic profits by hiring better workers.
Under a system of marketable pollution permits:
A. firms with lower costs of reducing emissions are likely to sell permits to those with higher costs of reducing emissions. B. environmentalists can decrease pollution by purchasing permits. C. the government can decrease the amount of pollution to the desired level. D. All of these are correct.
Answer the following questions true (T) or false (F)
1. One effect of adverse selection in a market is that the equilibrium quantity of the product may be smaller than it would have been if there were no asymmetric information problems. 2. Due to adverse selection, very few lemons will be sold in the market for used cars. 3. The situation in which one party to a transaction takes advantage of knowing more than the other party to the transaction is known as asymmetric information.