For firms that sell one product in a perfectly competitive market, marginal revenue is always:
A. equal to average total cost.
B. less than market price.
C. the same as market price.
D. greater than market price.
Answer: C
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Governments of market-oriented economies never tamper with the price mechanism.
Answer the following statement true (T) or false (F)
Positive economic analysis _____
a. evaluates policy changes and determines whether it is a good idea b. seeks to understand the outcome of a policy change c. cannot be proven incorrect d. is a statement about "what ought to be"
A market maker faces the following demand and supply for widgets. Eleven buyers are willing to buy at the following prices: $15, $14, $13, $12, $11, $10, $9, $8, $7, $6, $5 . Eleven sellers are also willing to sell at the same prices. How many transactions must the market maker make if he wants to maximize his profits?
a. 1 b. 2 c. 3 d. 4
Which calculation gives the firm’s profit margin?
a. Average profit = price × average cost b. Average profit = price ÷ average cost c. Average profit = price + average cost d. Average profit = price – average cost