Which of the following is NOT true of a perfectly competitive firm?
A. It sells only a small fraction of the total quantity exchanged in the market.
B. It seeks to maximize revenue.
C. It is unable to influence the price of the good it sells.
D. It faces a perfectly elastic demand curve.
Answer: B
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Refer to the figure above. What is the absolute value of the arc elasticity of demand when the price falls from $8 to $4?
A) 2 B) 4 C) 8 D) 10
Consumers who ________ will be more likely to buy goods in outlet malls at a lower price, while consumers who ________ will be more willing to pay full price in regular stores
A) are more price-sensitive; are less price-sensitive B) are less price-sensitive; are more price-sensitive C) have high levels of wealth; have low levels of wealth D) are more status-conscious; are less status-conscious
If a bank has legal reserves of $1 million, a reserve requirement of 10 percent, and check able deposits of $6 million, it can extend its check able deposits by
a. $1 million. b. $2 million. c. $4 million. d. $10 million.
Johnny Deer exclusively grew corn in each of the past three years. Under the Food, Conservation, and Energy Act of 2008, Deer:
A. must grow corn in the current year in order to receive direct payments from the federal government. B. can grow whatever crop he wants to in the current year but will only receive direct payments from the federal government if the price of corn falls below a targeted price. C. will receive countercyclical payments if the price of corn falls below a targeted price, even though he does not grow corn in the current year. D. must grow something other than corn to qualify for direct payments from the federal government.