In the short run a perfectly competitive firm will
A) never shut down.
B) shut down if P < ATC.
C) shut down if P < AVC.
D) shut down if P > AFC.
C
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Politicians and citizens may often choose policies that reduce economic efficiency because they are perceived as “fairer.”
Answer the following statement true (T) or false (F)
In a competitive market, a negative externality creates a deadweight loss because
A) the cost of the externality is double counted. B) a harm is generated. C) price equals social marginal cost. D) price equals private marginal cost.
Which of the following groups does not belong with the others?
A. Permanent residents B. Green-card recipients C. Temporary immigrants D. Overstaying aliens
When a monopoly price discriminates, it
A) increases the amount of consumer surplus. B) decreases its economic profit. C) converts consumer surplus into economic profit. D) converts economic profit into consumer surplus. E) has no effect on the deadweight loss in the market.