Which of the following statements is not correct?
a. In a long-run equilibrium, marginal firms make zero economic profit.
b. To maximize profit, firms should produce at a level of output where price equals average variable cost.
c. The amount of gold in the world is limited. Therefore, the gold jewelry market probably has a long-run supply curve that is upward sloping.
d. Long-run supply curves are typically more elastic than short-run supply curves.
b
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According to the law of supply, other things equal, when the price of a good or service rises, the quantity supplied increases, but supply does not
a. True b. False Indicate whether the statement is true or false
Which of the following is NOT an economic function of the U.S. government?
A. promoting price stability B. encouraging production of government-inhibited goods C. promoting competition D. providing public goods
Signals are
A) used by economic decision-makers to inform others about their plans. B) the method by which government planners inform economic decision-makers about the types of decisions they should make. C) the method by which firms determine their profit maximizing quantity. D) compact ways of conveying to economic decision makers information needed to identify industries where more resources are needed.
Suppose that for each firm in the competitive market for potatoes, long-run average cost is minimized at $0.20 per pound when 500 pounds are grown. If the long-run supply curve is horizontal, then
A) some firms will enjoy long-run profits because they operate at minimum average cost. B) the long-run price will be $0.20 per pound. C) each consumer will purchase $100 worth of potatoes. D) the long-run price will be set just above $0.20 per pound.