Properties of long-run competitive equilibrium with free entry include:
A. an equilibrium price equal to the minimum MC.
B. firms earning positive profits.
C. active firms producing at their efficient scales of production.
D. All of these are properties of long-run competitive equilibrium.
C. active firms producing at their efficient scales of production.
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Health care costs rose more than 10 percent in 2011, according to a survey of insurers by Aon Consulting Worldwide. Which of the following would be a fixed cost in a hospital?
A) an MRI machine B) bandages C) nurses D) syringes
A cutthroat competitor will not lower their price because they believe that
A. their competitors will lower their prices too. B. their competitors will raise their prices. C. they will lose money. D. they will be accused of unfair competition.
A monopoly
a. can set the price it charges for its output and earn unlimited profits. b. takes the market price as given and earns small but positive profits. c. can set the price it charges for its output but faces a downward-sloping demand curve so it cannot earn unlimited profits. d. can set the price it charges for its output but faces a horizontal demand curve so it can earn unlimited profits.
Economies of scale exist whenever:
A. average total costs are stationary as output increases. B. average total costs increase as output increases. C. average total costs decline as output increases. D. average total costs increase as output increases and average total costs are stationary as output increases.