In a perfectly competitive market, a firm that raises its price when its competitors do not
a. must have a differentiated product
b. must have relatively high costs and therefore must raise price to compensate
c. sells no goods
d. gains market share
e. will become a monopolist eventually
C
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Jill Johnson owns a pizzeria. She currently produces 10,000 pizzas per month at a total cost of $500. If she produced one more pizza her total cost rises to $500.11. What does this tell us about Jill's marginal cost of producing pizzas?
A) The marginal cost of producing pizzas cannot be determined without more information. B) The marginal cost of producing pizzas is rising. C) The marginal cost of producing pizzas is constant. D) The marginal cost of producing pizzas is falling.
If an inefficient public monopoly cannot provide a service at a price that sufficient numbers of people are willing to pay it:
A. can remain in operation by covering its losses with revenue from taxes. B. must shut down and leave the industry in the long run. C. should expand operations until demand is satisfied. D. will seek out more efficiencies.
Consumer sovereignty implies that
a. producers determine what goods will be produced and consumers are free to choose from among them b. consumers choose the composition of our economy's output c. goods are produced on the basis of need d. the government directs the production of consumer goods in the economy e. a committee of consumers determines the key issues in the economy
If price falls, what happens to the quantity demanded for a product?
a. It increases. b. It decreases. c. It does not change. d. Uncertain--economic theory has no answer to this question.