If firms are price takers this implies that
A. the marginal revenue curve is upward sloping.
B. the demand curve facing the firm is perfectly elastic.
C. in the short-run economic profits will be zero.
D. the total revenue curve is horizontal.
Answer: B
You might also like to view...
The techniques of regulation used in the U.S. are
(a) meant to solve basic problems, but they create others. (b) meant to re-enforce the "decisions of the marketplace." (c) meant to manage problems rather than solve them. (d) designed to make the economy more efficient than is possible with only the free market mechanism.
A consumer's demand for CDs can be represented by a line with slope -b and intercept a. If the current price of CDs is $P, then the ratio of consumer surplus to total expenditures on CDs equals
A) (a - P)(a - bP). B) 1/2(a - P)(a - bP). C) D(a - bP). D) (a - P)/P. E) (a/b - P)/(2P).
The purchase of a new machine to replace the one that is worn out is:
a. not included in GDP. b. included in gross investment. c. considered a personal consumption expenditure. d. not included in GNP. e. an increase in inventories.
A higher real interest rate typically induces consumers to:
a. Save less b. Purchase more imported goods c. Save more d. Purchase more goods that are bought using credit