Suppose a firm doubles its output in the long run. At the same time the unit cost of production remains unchanged. We can conclude that the firm is
A. exploiting the economies of scale available to it.
B. facing constant returns to scale.
C. not using the available technology efficiently.
D. facing diseconomies of scale.
Answer: B
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Suppose the demand curve for medical care services is perfectly inelastic. What will happen to the equilibrium price and quantity if supply increases?
a. Price and quantity will rise. b. Price will stay the same and quantity will rise. c. Price and quantity will fall. d. Price will fall and quantity will increase. e. Price will fall and quantity will stay the same.
For the single-price monopoly, marginal revenue is
a. more important than marginal cost b. always more than marginal cost c. always less than average cost d. always less than the price of output e. more significant than total revenue
Suppose Fiona earns an annual income of $70,000 . If the rate of growth of her income remains constant at 15 percent, she is most likely to earn _____ per year after 2 years
a. $78,987 b. $25,000 c. $10,000 d. $92,575
Competition as a dynamic process implies that the individual firms in an industry
a. face a perfectly elastic demand curve. b. utilize a variety of techniques, such as product, style, and price, to win the dollar votes of consumers. c. produce a homogeneous product. d. cooperate, attempting to establish a price and output structure so each firm can survive and continue to serve the consumer.