When managers of firms in a competitive market observe falling profits, they may infer that the market is experiencing
a. a violation of conventional market forces.
b. over-investment.
c. the entry of new firms.
d. too few firms in the market.
c
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A new U.S. import quota on imported steel would be likely to:
A. raise the cost of production to steel-using American firms. B. generate tax revenue to the government. C. decrease U.S. production of steel. D. increase the production of steel-using American firms.
When the supply of a good decreases, there will be a(n):
A. decrease in the quantity demanded. B. increase in the quantity demanded. C. decrease in buyers' reservation prices for the good. D. decrease in demand.
For the multiproduct cost function C(Q1, Q2) = 100 + 2Q1Q2 + 4Q12, what is the marginal cost function for good one?
A. MC1 = 2Q2 + 4Q1 ? Q22. B. MC1 = 4Q2 + 6Q1. C. MC1 = 2Q2 + 8Q1. D. MC1 = 100 + 2Q1Q2 + 4Q12.
Alex's Furniture Mart produces and sells tables in a perfectly competitive market. When Alex's Furniture Mart produces and sells 250 tables, its marginal cost is equal to $200, and AVC is rising. If the market price of tables is equal to $150, Alex's Furniture Mart should:
A. decrease its level of table production. B. increase its level of table production. C. continue producing 250 tables. D. raise the price of its tables.