What is the relationship between price and marginal revenue for firms in perfect competition? Explain
What will be an ideal response?
In perfect competition, price and marginal revenue are equal. This occurs because firms in perfectly competitive markets are price takers. Each additional unit sold results in an increase in revenue equal to the market price of the product.
You might also like to view...
When an economy experiences deflation, investment will:
A. decrease, because businesses will not take out loans that will increase in value over time. B. increase, because businesses will take out loans that will increase in value. C. decrease, because businesses will spend cash instead of borrowing it. D. increase, because businesses will spend cash instead of borrowing it.
According to the rational expectations theory, expansionary monetary policy is fully effective only if
a. the policy is anticipated by workers and firms. b. aggregate supply shifts to the left. c. the economy is operating at or above its potential output level. d. policy makers follow through on their previously announced plans. e. the effects of the policy are unexpected.
When you are able to supply others with goods and services they value highly relative to your opportunity costs,
What will be an ideal response?
Select the accurate statement below:
A) European Union budget problems are due to decline in real estate values since the Great Recession B) US budget problems are due to increasing Medicare and Social Security arising from demographic changes C) US budget problems are due to the rising costs of medical care from the expansion of Medicaid D) Japanese budget problems are due to the increase in the number of people below working age