When a firm's demand curve is tangent to its average total cost curve:
a. the firm must be operating in a monopolistically competitive market.
b. economic profits are zero
c. the firm must be earning economic profits.
d. the firm must be incurring economic losses.
b
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The absence of significant scale economies in 19th century agriculture outside the cotton South produced all of the following except
(a) More equal income distribution (b) Numerous family farms (c) The widespread need for schools (d) Large, corporate farms using the latest technology
Assume a subsidy to buyers has been enacted in the market in the graph shown. With the subsidy, the buyers buy _____ units and pay _____ for each of them.
A. 100; $46
B. 100; $30
C. 150; $40
D. 150; $24
For a given price, a decrease in demand will decrease consumer surplus
Indicate whether the statement is true or false
Unlike oligopoly, other market structures are such that
a. profits are usually low or nonexistent b. firms in those structures need not observe each other to make price and production decisions c. collusion within the structures is easy to accomplish because firms try to avoid competition d. prices tend toward a stable equilibrium e. there are more firms in every other structure