Which of the following is TRUE regarding a perfectly competitive firm?
A) The firm can charge a lower price than its competitors and thereby sell more output and increase its profits.
B) The firm always earns a normal profit.
C) The firm's marginal revenue continually decreases.
D) The firm's minimum efficient scale is small relative to the market demand.
D
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Refer to Figure 23-1. At point L in the figure above, which of the following is true?
A) Actual inventories are greater than planned inventories. B) The economy has achieved macroeconomic equilibrium. C) Aggregate expenditure is greater than GDP. D) GDP will be increasing.
In the above figure, if this natural monopolist were unregulated, the profit maximizing firm would produce
A) at Q1 output rate. B) at Q2 output rate. C) at Q3 output rate. D) past the Q3 output rate.
When regulators identify with the special interests of the industry they regulate, this behavior conforms with the
A) share-the-gains, share-the-pains hypothesis. B) rate-of-return hypothesis. C) lemon market hypothesis. D) capture hypothesis.
At any price equal to ______ a firm can maximize profit either by producing the best positive sales quantity or by shutting down.
A. the maximum of AC B. the minimum of MR C. the minimum of AC D. the minimum of MC