The marginal revenue curve is below the demand curve
A. If a firm must lower its price to sell additional output.
B. When a market is characterized by economies of scale.
C. For a competitive firm.
D. For all firms.
Answer: A
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Is a firm economically inefficient if it can cut its costs by producing less? Why or why not?
What will be an ideal response?
If different markets for a product produced by a monopolist can be separated and if the elasticity of demand differs between the two markets, then the monopolist will
A) be able to make higher profits by using price discrimination. B) charge a single price in all markets. C) go out of business. D) sell the product in only one of the markets with inelastic demand curves.
If Y = C + Ii, C = 100 + .80Y, Ii = 100, the equilibrium level of income is
a. $200 b. $400 c. $600 d. $800 e. $1,000
Expected utility theory predicts that individuals will fully insure in actuarily fair markets so long as their tastes are state-independent. How might adverse selection result in some individuals under-insuring?
What will be an ideal response?