Society will produce the efficient mix of output if all firms equate price and marginal cost.
Answer the following statement true (T) or false (F)
True
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If a corporate bond with a face value of $2,000 pays yearly coupon payments of $50, what is the coupon rate?
A) 2.5% B) 4% C) 25% D) 40%
According to the Fisher effect, if a lender and a borrower would agree on an interest rate of 8 percent when no inflation is expected, they should set a rate of _______ when an inflation rate of 3 percent is expected
a. 2 percent b. 5 percent c. 8 percent d. 11 percent
If a firm in a competitive price-searcher market finds that its marginal revenue exceeds its marginal cost at the current rate of output, it should
a. raise the price of the product and expand its output. b. raise the price of the product and reduce its output. c. lower the price of the product and expand its output. d. lower the price of the product and reduce its output.
With allocative efficiency:
A. the available supplies of factors of production are fixed in both quantity and quality. B. production of any particular mix of goods and services is that mix most wanted by society. C. production of any particular mix of goods and services occurs in the least costly way. D. the state of technology-or methods used to produce output-does not change.