Which of the following is true of a perfectly contestable market?
A. P > MC and P < ATC
B. P < ATC
C. P = MC
D. P > MC
Answer: C
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A rent ceiling results in a shortage of apartments. As a result, there is
A) only a loss of consumer surplus for tenants. B) only a loss of producer surplus for landlords. C) a loss of both consumer and producer surplus. D) a gain of both consumer and producer surplus.
When the price level in the United States rises, then net exports should
a. rise and equilibrium real GDP should increase. b. fall and equilibrium real GDP should increase. c. fall and equilibrium real GDP should decrease. d. rise and equilibrium real GDP should decrease.
Government failure means that government intervention fails to move us closer to our economic goals.
Answer the following statement true (T) or false (F)
If P = Q/15 represents marginal cost for a monopolist and market supply for a competitive industry and market demand is given by Qd = 500 - 10P, the difference between the monopoly equilibrium and the competitive equilibrium is that a monopolist would produce:
A. 187.5 units of output at a price of $31.25, whereas competitive output would be 250 units at a price of $25. B. 250 units of output at a price of $25, whereas competitive output would be 300 units at a price of $20. C. 187.5 units of output at a price of $31.25 each, whereas competitive output would be 300 units at a price of $20. D. 300 units of output at a price of $20, whereas competitive output would be 187.5 units at a price of $31.25.