In a market economy, supply and demand determine both the quantity of each good produced and the price at which it is sold
a. True
b. False
Indicate whether the statement is true or false
True
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All of the following are true regarding tacit collusion except which one?
A) It is more likely when barriers to entry are high. B) It is more likely when the price elasticity of demand is large. C) It is an informal, unstated agreement. D) It harms buyers.
Which of the following explains why long-run average cost at first decreases as output increases?
a. diseconomies of scale b. less-efficient use of inputs c. fixed costs becoming spread out over more units of output d. gains from specialization of inputs
If net exports is a negative number for a particular year, then
a. the value of firms' inventories declined over the course of the year. b. consumption exceeded the sum of investment and government purchases during the year. c. the value of goods sold to foreigners exceeded the value of foreign goods purchased during the year. d. the value of foreign goods purchased exceeded the value of goods sold to foreigners during the year.
Consider a firm with the following cost information: ATC = $15, AVC = $12, and MC = $14. If we know that this firm has decided to produce Q = 20 by following the rule to maximize profits or minimize losses, then the price of the output is:
A. $12. B. $14. C. $15. D. $20.