Which is a feature of a purely competitive market?
A. Price differences between firms producing the same product
B. Significant barriers to entry into the industry
C. The industry's demand curve is perfectly elastic
D. Products are standardized or homogeneous
D. Products are standardized or homogeneous
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Think about each of the items in the list and explain how they affect incen-tives and might change the choices that people make:
What will be an ideal response?
In order to maximize profits in the short run, a firm should produce where
a. marginal revenue exceeds marginal cost by the greatest amount. b. marginal cost is minimized. c. average total cost is minimized. d. marginal cost equals marginal revenue.
Financial intermediaries are institutions that
A. oversee the activities of government institutions such as the Federal Reserve. B. regulate the activities of stock and bond markets. C. act as middlemen in the process of directing funds from savers to investors. D. produce money for the federal government.
When MFC > MRP, a firm in a competitive market will
A. hire more workers. B. earn additional profits. C. layoff workers. D. stop hiring additional workers.