In a competitive marketplace, prices adjust until
A) MRS's are equal to zero.
B) excess supply equals excess demand equals zero in all markets.
C) each consumer has maximized utility subject to his budget constraint.
D) all firms earn zero profit.
B
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“The market has failed to provide enough rental housing in New York City. This demonstrates another failure of free markets-they may lead to shortages of necessities.” Explain why you agree or disagree.
What will be an ideal response?
Refer to Figure 4-5. What is the area that represents consumer surplus after the imposition of the ceiling?
A) A + B + D + F B) A + B + C C) A + B + D + F + G D) A + B+ D
In which of the following scenarios would a predatory pricing scheme have the greatest chance of success, all else constant?
A) The predatory price is set well below cost, many rivals are likely to enter after the strategy ends, and profits can be recouped only over a relatively long period of time. B) The predatory price is set well below cost, relatively few rivals are likely to enter after the strategy ends, and profits can be recouped in a relatively long period of time. C) The predatory price is set just below cost, many rivals are likely to enter after the strategy ends, and profits can be recouped in a moderate period of time. D) The predatory price is set just below cost, relatively few rivals are likely to enter after the strategy ends, and profits can be recouped in a very short period of time.
One disadvantage of corporations is the double taxation of income to the owners
a. True b. False Indicate whether the statement is true or false