Refer to Figure 15-12. If this industry was organized as a perfectly competitive industry, the market output and market price would be
A) output = 83; price = $22. B) output = 62; price = $18.
C) output = 62; price = $24. D) output = 104; price = $20.80.
A
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Suppose a tax equal to the value of the marginal external cost at the optimal output is imposed on a pollution generating good. All of the following will result from the tax except
A) an increase in demand for the good. B) a decrease in the equilibrium quantity produced and consumed. C) an increase in the equilibrium market price. D) a decrease in market supply of the good.
The supply-of-money curve is almost perfectly inelastic because:
a. as interest rates rise, people will want to be supplied with more loans b. the Fed makes more money available in response to higher interest rates. c. banks generally find loans more profitable than keeping their assets as cash in their vaults or reserve deposits at the Fed, whether interest rates are 4% or 10%. d. the Fed lowers the discount rate as interest rates rise.
Normative statements describe how the world is, while positive statements prescribe how the world should be
a. True b. False Indicate whether the statement is true or false
Costa Rica is a leading exporter of bananas. What explains the comparative advantage of this country in banana production?
A) climate and soil conditions in Costa Rica which are well-suited for banana production B) investment by multinational firms such as Chiquita Brands International and the Dole Food Company C) a large supply of unskilled labor D) positive externalities