Which of the following is a characteristic of a competitive price-taker market?
A. Profit maximizing firms in the market will expand output until price equals average variable cost.
B. The market demand curve for the product is a horizontal line.
C. There are many firms in the market, each producing a small share of total market output.
D. The product produced by each of the firms is differentiated.
Answer: C
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According to the theory of purchasing power parity, whenever a country's price level is expected to fall relative to another country's price level,
A) its currency's real exchange rate relative to the other country's currency should rise. B) its currency should depreciate relative to the other country's currency. C) its currency should appreciate relative to the other country's currency. D) its nominal interest rate should rise relative to the other country's nominal interest rate.
Which of the following statements is correct? Classical economists
a. believe demand as well as supply determines aggregate output. b. believed in an active role for government in managing the economy through tax policy. c. gave little explicit attention to factors that determined the overall demand for commodities. d. were worried about depressions that could come about because of too little government consumption.
Refer to the below graph. A change from Point A to Point C represents a(n)
a. increase in supply.
b. decrease in supply.
c. increase in quantity supplied.
d. decrease in quantity supplied.
Which of the following is true?
A. Both if there are only two firms in a market, prices must be above marginal cost and if there is only one firm in a market, prices must be above marginal cost are correct. B. If there are only two firms in a market, prices must be above marginal cost. C. If there is only one firm in a market, prices must be above marginal cost. D. None of the answers is correct.