Refer to Figure 2-7. Suppose worker productivity increases so that the total number of vehicles produced increases as the company adds more machinery, workers, and changes the layout of the factory. This is best represented by the
A) movement from H to J in Graph B. B) movement from G to H in Graph B.
C) movement from K to L in Graph C. D) movement from E to F in Graph A.
B
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What assumptions in the perfect competition model ensure that economic profit is zero in the long run? Explain
What will be an ideal response?
When economies of scale are important, imposing competition by splitting a monopolistic firm into many rival units will
a. lead to an increase in the per-unit cost of production in the industry. b. not affect per-unit costs but will affect demand conditions. c. generally increase the social efficiency of production. d. cause the industry demand curve to increase (shift to the right).
A firm facing a linear demand curve maximizes its total revenue where demand is:
A. perfectly inelastic. B. inelastic. C. elastic. D. unit elastic.
If firms have an incentive to hide information from mandatory disclosure because the information is proprietary, then which of the following remedies is the least intrusive way to overcome this incentive?
A) leave it to the market B) separation of functions C) supervisory oversight D) socialization of information production