Which of the following is a true statement?
a. A price-taker firm can sell additional units of output without having to lower its price, while a price-searcher firm must lower its price in order to sell additional units.
b. A price-searcher firm can sell additional units of output without having to lower its price, while a price-taker firm must lower its price in order to sell additional units.
c. Both price searchers and price takers can sell additional units of output without having to lower their price.
d. Both price searchers and price takers must lower their price in order to sell additional units of output.
A
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Refer to the following graph. The price of capital (r) is $20.
Why wouldn't the firm choose to produce 5,000 units of output with the combination at A?
A. At A, MPK / r > MPL / w. B. At A, MRTS < 3/2. C. At A, MPL > MPK. D. both a and b E. none of the above
Suppose that Harold buys collision insurance for his car and then drives it recklessly. This is an example of:
A. a positive spillover. B. moral hazard. C. adverse selection. D. irrational behavior.
The primary interest of firms engaging in offshoring is to find lower wages and to decrease production costs
Indicate whether the statement is true or false
If the monopoly's demand curve intersects the AVC curve at minimum AVC, the firm will shut down
Indicate whether the statement is true or false