If the marginal cost curve of all identical firms in a perfectly competitive industry are horizontal at the same per-unit cost, then the market's consumer surplus equals the area
A. below the marginal cost curve.
B. above the demand curve.
C. under the demand curve and above the marginal cost curve.
D. above the demand curve and beneath the marginal cost curve.
Answer: C
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With fixed costs of $200, a firm has average total costs of $5 and average variable costs of $3 . Its output is: a. 66.67 units
b. Need more information c. 100 units. d. 40 units.
The main international repercussion of either a fiscal expansion or monetary contraction is to
a. raise interest rates and the exchange rate, thereby crowding out net exports. b. raise interest rates and lower the exchange rate, thereby crowding in net exports. c. lower interest rates and the exchange rate, thereby crowding in net exports. d. lower interest rates and raise the exchange rate, thereby crowding out net exports.
A person is seen placing a wager on the Super Bowl. It can be concluded that
a. the person is risk-preferring. b. the person is either risk-averse or risk-neutral, but not risk-preferring. c. the person is either risk-neutral or risk-preferring, but not risk-averse. d. we need more information before making a conclusion regarding this person's attitudes towards risk.
Recall the Application about the 1998 merger between Pennzoil and Quaker State to answer the following question(s). The merger resulted in a company with a market share of 38 percent: 29 percent from Pennzoil and 9 percent from Quaker State.Recall the Application. A recent study concluded that following the merger between Pennzoil and Quaker State, the new company ________ the price of Pennzoil products and ________ the price of Quaker State products.
A. increased; increased B. decreased; increased C. increased; did not change D. did not change; increased