One implication of the shape of the demand curve facing a perfectly competitive firm is that:
A. if the firm increases its price above the market price, it will earn higher revenue.
B. if the firm increases its price above the market price, it will earn zero revenue.
C. the market would be unable to reach a new equilibrium if demand changed.
D. if the firm decreases its price below the market price, it will earn higher revenue.
Answer: B
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If the percentage change in the quantity supplied of a good is less than the percentage change in price of the good, the good is said to have a(n):
A) inelastic supply. B) unit elastic supply. C) elastic supply. D) perfectly elastic supply.
The idea of opportunity cost suggests that the cost of a particular choice should be measured by the
a. price of the good chosen b. price of the good divided by income c. value of the best alternative sacrificed d. amount of the good consumed e. sum of the costs of all foregone opportunities
Pure monopoly is defined as a
A. one-firm industry. B. market structure in which there are many substitute products. C. market structure maintained by entry of many rival firms. D. market structure created by special government sanctions.
A market is not a pure monopoly if firms
A. can enter it freely. B. sell unique products. C. can exit the market freely. D. require government permission to sell in the market.