In perfect competition, a firm that maximizes its economic profit will sell its good at a price that is
A) below the market price.
B) at the market price.
C) above the market price.
D) below the market price if its supply curve is inelastic and above the market price if its supply curve is elastic.
B
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________ behavioral assumption about humans was that people usually act in a rational, self-interested way
A) Adam Smith's B) Janet Yellen's C) Karl Marx's D) Thomas Malthus's
Regulating an industry to remove all economic profit
a. removes all incentive for efficiency and responsiveness to consumer demand. b. removes distortions caused by cross subsidies. c. removes allocative inefficiency. d. increases incentives to be productively efficient.
When a second firm enters a market, the original firm's profits decline because:
A. the original firm's price decreases. B. the original firm's ATC increases. C. the original firm's quantity decreases. D. All of these are correct.
According to the Lucas supply function, if people's expectations are ________, then the amount of output they produce is not related to the price level.
A. too low B. on target C. too high D. none of the above