When firms in a perfectly competitive market face the same costs, in the long run they must be operating
a. under diseconomies of scale.
b. with small, but positive, levels of profit.
c. at their efficient scale.
d. where price is equal to average fixed cost.
c
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Combating recession may require the government to
A. decrease aggregate supply. B. increase aggregate demand. C. decrease aggregate demand. D. decrease government spending.
Producers play a disproportionately large role in influencing public regulation because they have a strong interest in matters that affect their specialized source of income
a. True b. False
The Board of Governors of the Federal Reserve does each of the following, except
A. sit on the Federal Open Market Committee. B. serve on the Board at the pleasure of the President, who can make individual governors resign at any time. C. carry out monetary policy. D. raise and lower reserve requirements.
Which of the following is the best description of the effect of firms’ perceptions of the future on planned investment?
a. It is chaotic and hard to analyze. b. It has an inverse relationship. c. It has no relationship. d. It compounds over time.