Firms in perfectly competitive markets who wish to maximize profits should produce where:
A. marginal revenue and average revenue are equal.
B. marginal cost and average cost are equal.
C. marginal revenue and marginal cost are equal.
D. marginal revenue and market price are equal.
Answer: C
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A major problem that may occur with models that predict the values of economic variables in the future is that
a. researchers are pessimistic about the future. b. the model may fail to acknowledge that economic actors will change their behavior in response to changing situations. c. the model may make predictions that conflict with widely held opinions. d. no one cares about these predictions.
Which of the following will shift the labor demand curve to the right?
A. An increase in the price of a competing, substitute input B. An increase in the use of factory automation C. A reduction in the demand for the output produced by labor D. A reduction in the wage rate
There are fewer than half as many publishers of college textbooks in the United States now as a generation ago. Three companies alone account for almost two-thirds of the sale of new textbooks. This market situation characterized by very few sellers is
known as A) an oligopoly. B) perfect competition. C) pure monopoly. D) monopolistic competition.
The elasticity of demand for labor will be less the
A) longer the time period. B) easier it is to substitute one input for another. C) less the demand elasticity for the final product. D) larger the share of total costs accounted for by labor.