In perfect competition, marginal revenue
A) increases as more is sold.
B) decreases as more is sold.
C) is equal to the market price.
D) is zero.
E) is always greater than marginal cost.
C
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If net exports is a negative number, the government sector must ________ if the private sector is in a ________
A) run a surplus; surplus B) equal zero; deficit C) run a deficit; surplus D) The statement errs because the accounts are not related.
If we assume that velocity is constant, and if the money supply increases by 6 percent, we would expect, ceteris paribus, that the price level would
A) increase by 3 percent. B) increase by 6 percent. C) decrease by 3 percent. D) decrease by 6 percent.
Suppose the demand for macaroni is inelastic, the supply of macaroni is elastic, the demand for cigarettes is inelastic, and the supply of cigarettes is elastic. If a tax were levied on the sellers of both of these commodities, we would expect that the burden of
a. both taxes would fall more heavily on the buyers than on the sellers. b. the macaroni tax would fall more heavily on the sellers than on the buyers, and the burden of the cigarette tax would fall more heavily on the buyers than on the sellers. c. the macaroni tax would fall more heavily on the buyers than on the sellers, and the burden of the cigarette tax would fall more heavily on the sellers than on the buyers. d. both taxes would fall more heavily on the sellers than on the buyers.
If Rita's labor-supply curve is downward-sloping, then for Rita a. an increase in the wage creates an income effect that is greater than the substitution effect. b. an increase in the wage creates a substitution effect that is greater than the income effect. c. leisure and consumption are perfect substitutes
d. leisure and consumption are perfect complements.