Perfectly competitive markets are characterized by
a. conditions that discourage new firms from entering the market
b. conditions that allow firms to determine how much they wish to produce, without influencing the market price.
c. conditions that presume that each firm produces a unique product.
d. conditions that force firms to advertise their product heavily, to compete with other producers.
b
You might also like to view...
If real disposable income increased by $10,000 and real consumption spending increased by $7,500, what is the marginal propensity to consume (MPC)?
a. 0.25 b. 1.0 c. 0.75 d. 1.75 e. 1.25
Suppose that the United States and Italy both produce wine and shoes. In the United States, wine sells for $10 a bottle and shoes sell for $40 a pair. In Italy, wine sells for 15 euros a bottle and shoes sell for 20 euros a pair. Given this information, trade will flow in both directions if the price of a dollar is between
A. 1.5 and 2.5 euros. B. .5 and .75 euro. C. .67 and 2 euros. D. 2.0 and 3.0 euros.
Refer to the graphs shown. In which graph is there no consumer surplus either with or without a per-unit tax?
A. A. B. B. C. C. D. D.
The law of diminishing returns causes a firm's short-run marginal cost curve to be s-shaped
a. True b. False Indicate whether the statement is true or false