Refer to the graph shown. Which supply curve is perfectly elastic?
A. A
B. B
C. C
D. D
Answer: A
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Assume a perfectly competitive firm is in long-run equilibrium and there is a decrease in market demand for the firm's output. Which of the following will occur?
A) Existing firms will maintain the original level of output, but they will shift their cost functions down in the short run. B) Existing firms will raise price to cover the reduction in quantity demanded and maintain total revenue in the short run. C) Existing firms will reduce output in the short run. D) Market price will be above its original level.
Platform monopolies initially make large losses because they:
A. receive subsidies from other businesses. B. are trying to gain market share as quickly as possible. C. have to hire high-salary tech employees. D. receive subsidies from government.
The following are all functions of money except
A. unit of account. B. medium of exchange. C. source of anxiety. D. store of value.
Suppose the demand for milk is relatively inelastic. What happens to sales revenue if the government imposes a price floor above the free-market equilibrium price in the market for milk?
A) Sales revenue remains unchanged. B) Sales revenue rises. C) Sales revenue falls. D) It cannot be determined without information on prices.