In a perfectly competitive market in which all firms are maximizing their economic profits, the demand and supply curves intersect at a price of $8. From this we know that each
A) firm's average total cost of producing the good is $8.
B) firm's average variable cost of producing the good is $8.
C) firm's marginal cost of producing the good is $8.
D) firm is earning positive economic profits at a price of $8 or more.
Answer: C
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Because prices are slow to move in the short-run, when the Federal Reserve lowers the federal funds rate
A) nominal interest rates rise. B) real interest rates fall. C) inflation falls. D) real interest rates rise.
In the simple Keynesian model, government spending
a. have a smaller multiplier than tax changes. b. can have a larger or smaller multiplier depending upon monetary policy c. have the same multiplier as changes in taxes. d. have a greater multiplier than tax changes.
Which of the following would indicate that an income tax is progressive?
a. high-income people pay $3,000 . low-income people pay $1,000 b. low-income people pay $3,000 . high-income people pay $1,000 c. high-income and low-income people all pay $1000 each d. high-income people pay 20 percent of their income in taxes; low-income people pay 10 percent e. both high-income and low-income people pay 10 percent of their income in taxes
The free-rider problem makes it unlikely that poverty will be entirely eliminated through private charity
a. True b. False Indicate whether the statement is true or false