The market structure of perfect competition exists when
A) there are a small number of interdependent firms that constitute the entire market.
B) there is a single producer of a product.
C) there are many producers of differentiated products.
D) there are many producers of a homogeneous product.
Answer: D
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If the production possibilities frontier of one trade partner ("Country A") is bowed out (concave to the origin), then increased specialization in production by that country will
A) increase the economic welfare of both countries. B) increase the economic welfare of only Country A. C) decrease the economic welfare of Country A. D) decrease the economic welfare of Country B. E) not affect the economic welfare of either country.
When a firm is experiencing economies of scale, long-run
a. average total cost is minimized. b. average total cost is greater than long-run marginal cost. c. average total cost is less than long-run marginal cost. d. marginal cost is minimized.
Which of the following statistics is usually regarded as the best single measure of a society's economic well-being?
a. the unemployment rate b. the inflation rate c. gross domestic product d. the trade deficit
Sulfur Dioxide Discharged (Tons)Firm AFirm B10$8,000$9,000910,00012,000815,00018,000720,00027,000628,00037,000Table 16.3Table 16.3 shows the production cost for two utilities at different levels of sulfur dioxide emissions. Assume that the government issued 8 marketable pollution permits to each firm. Suppose that Firm A has already sold a permit to Firm B. If Firm A contemplates selling a second permit to Firm B, what is Firm A's willingness to accept?
A. $5,000 B. $6,000 C. $7,000 D. $8,000