It is usually assumed that a perfectly competitive firm's supply curve is given by its marginal cost curve. In order for this to be true, which of the following additional assumptions are necessary? I. That the firm seeks to maximize profits. II. That the marginal cost curve be positively sloped. III. That price exceeds average variable cost. IV. That price exceeds average total cost
a. All of the above.
b. I and II but not III and IV.
c. I and III but not II and IV.
d. I, II and III, but not IV.
d
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A perfectly competitive firm has the cost function TC = 1000 + 2Q + 0.1 Q2. What is the lowest price at which this firm can break even?
What will be an ideal response?
The excise tax on gasoline is based on the ability-to-pay principle of taxation
a. True b. False
If the government of a country with a zero trade balance started with a budget deficit and moved to a budget surplus, domestic investment would
a. rise and there would be a trade surplus. b. rise and there would be a trade deficit. c. fall and there would be a trade surplus. d. fall and there would be a trade deficit.
Suppose that market demand for a good is Q = 480 - 2p. The marginal cost is MC = 2Q. Calculate the deadweight loss resulting from a monopoly in this market
What will be an ideal response?