In a perfectly competitive market buyers want to buy 20,000 units and sellers want to sell 20,000 units of a product when the price is $50 per unit. ABC Corporation, one seller in this market,
A. will sell a fixed number of units regardless of how the price changes.
B. faces a downward-sloping demand curve for its product.
C. will maximize profit by selling at a price less than $50.
D. faces a perfectly elastic demand curve at a price of $50.
Answer: D
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Exhibit 3-8 Demand and Supply Data for Video Games ? Price Quantity Demanded of Video Games Quantity Supplied of Video Games $75 400 900 70 450 850 65 500 800 60 550 750 55 600 700 50 650 650 45 700 600 40 750 550 ? In Exhibit 3-8, if there is a shortage of video games of 200 units, the current price of video games must be:
A. $60. B. $55. C. $40. D. $45.
The purpose of the Basel Committee was to
A) achieve a better coordination of the surveillance exercised by national authorities over the international banking system. B) achieve a better coordination of domestic banking systems. C) achieve a better coordination between brokers and investment bankers. D) achieve a better coordination between bond holder and bon issuers. E) manipulate bank rates for more leverage profits.
By taking the short position on a futures contract of $100,000 at a price of 96 you are agreeing to ________ a ________ face value security for ________
A) sell; $100,000; $96,000. B) sell; $96,000; $100,000. C) buy; $100,000; $96,000. D) buy; $96,000; $100,000.
Which of the following conditions is necessary in order for the private market to efficiently solve an externality problem?
a. The person who creates the externality must have the legal right to do so. b. The person harmed by the externality must have a legal right to be compensated. c. The value of any side payment must be smaller than the marginal cost of producing the externality. d. The value of any side payment must be smaller than the marginal cost of creating the externality. e. Side payments must be arranged without cost.