In perfect competition, why is a firm's marginal revenue curve also the demand curve for the firm's output?
What will be an ideal response?
A perfectly competitive firm's demand curve is a horizontal line at the market price. This result means that the price it receives is the same for every unit sold. The marginal revenue received by the firm is the change in total revenue from selling one more unit, which is the constant market price. So a perfectly competitive firm's demand curve is the same as its marginal revenue curve.
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If net interest and net transfers are zero, and a country's exports exceed its imports, the country definitely has ________
A) a current account surplus B) a current account deficit C) a capital and financial account surplus D) an official settlements account surplus
An economy that engages in international trade is called
A) a cooperative economy. B) a modern economy. C) an engaged economy. D) an open economy.
A leftward shift of a supply curve is called a(n)
a. decrease in demand b. increase in supply c. decrease in supply d. increase in quantity supplied e. decrease in quantity supplied
The present value of $1 million to be received in the future will
a. increase if the interest rate rises. b. increase if the payment is received at a more distant time in the future. c. be greater than $1 million. d. increase if the interest rate were to fall from 8 percent to 4 percent.