The figure above shows cost curves for a perfectly competitive firm. A profit-maximizing firm will break even when market price is:
A. $1.50
B. $0.60
C. $0.80
D. $1.60
Answer: A
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If aggregate demand is stable and there is economic growth, the economy will experience
A) secular depreciation. B) secular decline. C) secular deflation. D) secular degeneration.
Pricing insurance policies is made difficult because buyers have more information than sellers. This difficulty is an example of
A) adverse selection. B) asymmetric information. C) the free-rider problem. D) moral hazard.
If the slope of a linear function changes with no change in the Y-intercept
a. the graph shifts either up or down in a parallel way. b. the graph remains unchanged. c. the graph rotates about its X-intercept. d. the graph rotates about its Y-intercept.
According to the rational expectations school, when monetary policy makers do exactly what is expected of them, their efforts to stimulate the economy will have no effect on employment
a. True b. False Indicate whether the statement is true or false