A competitive price-taker market in long-run equilibrium is described as efficient because firms
a. produce at the low point on their average cost curve.
b. produce where marginal cost yields a profit.
c. earn no more than the cost of capital.
d. are not profitable.
A
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Consider a car dealership advertises a three-year lease at $250 per month. When you arrive to apply, you discover that the lease requires a downpayment of $3600 dollars. You will undertake the lease if
A) you value the lease at least $350 per month. B) you value the lease at least $250 per month, the $3600 is a sunk cost. C) you value the lease less than $350 per month. D) you value buying a new car at $400 per month.
The ________ often workers get paid, other things constant, the lower their average money balances, so the ________ active the money supply and the greater its velocity
a. less; less b. more; less c. less; more d. more; more
The main reason our gross savings rate rose so quickly between 1993 and 2000 was that _________________.
Fill in the blank(s) with the appropriate word(s).
When marginal cost pricing occurs
A. the firm is at the shutdown point. B. the firm can only break even if it does not set price to marginal cost. C. price equals the additional cost society incurs in producing the next unit of an item. D. price equals average variable cost but exceeds average total cost.