Firms in perfectly competitive markets typically have:
A. one profit-maximizing level of output.
B. several profit-maximizing levels of output to choose from.
C. two profit-maximizing levels of output to choose from.
D. no chance of maximizing profits, since they have no control over market price.
A. one profit-maximizing level of output.
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California passed a law called “Proposition 2 ½” that limited property taxes to 2.5 percent of property value. Naturally this reduced taxes on many properties, and apartment landlords had more money at the end of the year at given rents. This windfall could be called an economic rent only if
A. we push the definition of economic rent too far. B. the supply of rental units can be expanded. C. the supply of rental units is fixed. D. competitors can build housing at costs that yield the return that was earned before the tax cut.
Using the information in the above table, the unemployment rate is
A) 4.5 percent. B) 4.3 percent. C) 2.8 percent. D) 6.0 percent.
If Best Dogs only sells their hot dogs in packages of eight, all of the following are true except which one?
A) Best Dogs is using an all-or-nothing pricing scheme. B) Best Dogs' customers are spending the consumer surplus they would have received on the first few hot dogs on the last few hot dogs. C) Best Dogs has market power. D) Best Dogs is trying to prevent arbitrage.
In the long run in a perfectly competitive market, economic profit or loss is
a. the main determinant of total cost b. the main driving force determining consumer preferences c. the basis of all government policy d. the main driving force behind economic change e. expected to persist indefinitely