If government forced a firm to charge a price equal to marginal cost in a situation where there are scale economies,
A. new firms would enter the industry.
B. the firm would be forced to go bankrupt.
C. positive economic profit would grow even larger.
D. marginal cost would exceed average cost.
Answer: B
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The quantity theory of money and prices
A) is derived from the equation of exchange assuming that prices remain constant. B) shows how a change in the price level leads to a change in the money supply. C) shows how the demand for money is inversely related to the price level. D) is the hypothesis that changes in the money supply leads to proportional changes in the price level.
Based on the information above, video games have
a. A unitary elastic demand b. An inelastic demand c. An elastic demand d. A perfectly elastic demand
If a cartel seeks to maximize profits, the market share (or quota) for each firm should be set at a level such that the ____ of all firms is identical
a. average total cost b. average profit c. marginal profit d. marginal cost e. marginal revenue
An import quota is a tax on imports
Indicate whether the statement is true or false