Refer to Figure 23.2 for a perfectly competitive firm. If this firm produces the level of output corresponding to point C in the short run, it will earn
A. A loss.
B. A profit, although not the maximum profit possible.
C. The maximum profit possible.
D. Zero profit.
Answer: C
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Consumer surplus is equal to
A) marginal benefit minus price summed over the quantity consumed. B) price minus marginal benefit summed over the quantity consumed. C) marginal benefit summed over the quantity consumed. D) price multiplied by the quantity consumed. E) marginal benefit plus price summed over the quantity consumed.
If a borrower takes out a $200 million loan in a repo agreement and is asked to post $220 million of mortgage-backed securities as collateral, the "haircut" is
A) 5%. B) 10%. C) 20%. D) 50%.
A monopolist
A. can raise its price without losing any sales because it is the only supplier in the market. B. can earn a greater than normal rate of return in the long run. C. always charges a price that is higher than marginal revenue. D. both a and b E. both b and c
Describe a tit-for-tat strategy.
What will be an ideal response?