Under perfect competition, the market price is equal to the _____ of a profit-maximizing firm.
a. fixed costs
b. marginal costs.
c. sunk costs.
d. variable costs.
b
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Which of the following would cause a shift in the demand curve from point A to point B?
A. a decrease in income (inferior good) B. an increase in the price of a substitute good C. an increase in income (normal good) D. all of the above
Suppose OPEC oil cartel announces that it will increase production of oil. Using supply and demand analysis to predict the effect of increased production on equilibrium price and quantity, the first step is to show the:
A. demand curve shifting to the right. B. supply curve shifting to the right. C. demand curve shifting to the left. D. supply curve shifting to the left.
The ________ for a perfectly competitive industry is the horizontal sum of the individual firms? marginal cost curves above AVC.
A. short-run industry marginal revenue curve B. long-run industry supply curve C. long-run industry marginal revenue curve D. short-run industry supply curve