Fixed prices in a free-market economy can increase efficiency.
Answer the following statement true (T) or false (F)
False
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Which of the following is not a component of the M2 money supply?
A) Cash in circulation B) Gold owned by the federal authorities C) Deposits in checking accounts D) Any issued traveler's checks E) All of the above.
If a natural monopoly has an average cost pricing rule imposed, the rule will
A) maximize total surplus in the regulated industry. B) generate an economic loss for the regulated firm. C) reduce the consumer surplus and generate a deadweight loss when compared to a marginal cost pricing rule. D) set price below marginal cost.
In the long run, firms in a perfectly competitive market choose to produce a quantity:
A. that does not cover minimum average variable costs. B. where marginal costs are less than average variable costs. C. that earns zero economic profits. D. where ATC and AVC are at their minimum values.
Describe the characteristics of the long-run aggregate supply curve. Explain how changes in the price level affect the short-run aggregate supply curve and the long-run aggregate supply curve.
What will be an ideal response?