In a perfectly competitive market, producers:
A. can influence the price upward by restricting output.
B. are able to sell as much as they want without affecting the market price.
C. often undercut the competition's price and force firms to leave the market.
D. None of these is true of perfectly competitive markets.
Answer: B
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Explain why the long-run product price for a perfectly competitive firm will equal its minimum average total cost
What will be an ideal response?
Many economists would argue that some frictional unemployment
A. creates massive economic disruptions and should be eliminated as quickly as feasible. B. cannot and probably should not be eliminated. C. no longer exists because increased unemployment benefits have generally solved this problem. D. should be eliminated whatever the cost.
If a city decides to restrict the number of pizza parlors,
A) the price of pizza will increase. B) pizza parlors will make higher profits. C) total welfare will decrease. D) All of the above.
At one time sea lions were depleting the stock of steelhead trout. One idea to scare sea lions away from the Washington coast was to launch fake killer whales, which are predators of sea lions. The cost of making the first whale is $16,000 ($5,000 for materials and $11,000 for the mold). The mold can be reused to make additional whales, and so additional whales cost $5,000 each. Based on these numbers, the total cost of making two fake killer whales would be:
A. $21,000. B. $11,000. C. $16,000. D. $10,000.