Which of the following is an accurate description of long-run equilibrium for a perfectly competitive firm?
a. At the equilibrium point, the average total costs for short run and long run are unrelated.
b. At the equilibrium point, the average total costs for short run are lower than for long run.
c. At the equilibrium point, the average total costs for short run are higher than for long run.
d. At the equilibrium point, the average total costs for short run and long run are equal.
d. At the equilibrium point, the average total costs for short run and long run are equal.
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A firm is concerned about the possibility of patent infringement and has hired an attorney to review patents. If the attorney is reviewing 100 patents and the marginal cost of reviewing the 100th patent is $50 and the expected marginal benefit of reviewing the 100th patent is $50, which of the following is true?
A) The firm is maximizing the total cost of infringement. B) The firm is minimizing the total cost of infringement. C) The firm's total cost of infringement will decrease if the number of patents reviewed decreases. D) The firm's total cost of infringement will decrease if the number of patents reviewed increases.
When an expansionary gap exists, actual output ________ potential output and the rate of inflation will tend to ________.
A. is less than; increase B. exceeds; increase C. is less than; decrease D. exceeds; decrease
The price faced by a perfectly competitive firm is
A. determined by market demand and supply. B. the same as the market demand curve. C. the same as the market supply curve. D. the same as the firm's marginal cost curve.
The above figure shows the market for labor. The employer is a monopsony. If the workers are unionized, the wage will be
A) $5 per hour. B) between $5 per hour and $15 per hour. C) above $15 per hour. D) less than if the workers were not unionized.