Suppose a competitive industry produces output, Q, using some input, i, where the price of the output is PQ and the input price is Pi. Efficient use of resources requires that
A) MRPi = MPi.
B) MRPi = Mpi/PQ.
C) MRPi = MPi PQ.
D) MRPi = Pi.
D
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Suppose the downward sloping labor demand curve shifts rightward in a labor market with a single employer (monopsony). What happens to the equilibrium wage and level of employment in the market?
A) Wage and level of employment increase. B) Wage increases and level of employment declines. C) Wage decreases and level of employment increases. D) Wage and level of employment decline.
A firm that is a natural monopoly
a. is not likely to be concerned about new entrants eroding its monopoly power. b. is taking advantage of economies of scale. c. would experience a higher average total cost if more firms entered the market. d. All of the above are correct.
The theory of economic rent can be used to explain high incomes received by movie stars and athletes.
Answer the following statement true (T) or false (F)
Bonnie is a self employed. She makes floral arrangements in a building she rents. She owns the delivery vehicle and has hired a delivery driver. She is an example of
A) entrepreneurial ability. B) labor. C) physical capital. D) human capital.