The demand curve confronting a competitive firm
A. Is horizontal, as is the market demand curve.
B. Slopes downward, while the market demand curve is horizontal.
C. Slopes downward, and the marginal revenue curve is below it.
D. Equals the marginal revenue curve.
Answer: D
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Which of the following is NOT a possible resolution of externalities?
a. Coasian bargaining b. regulatory directives c. taxes and subsidies d. cap and trade e. all of the above are possible resolutions of externalities
In the U.S., people tend to discard items rather than repair them because
a. Americans are lazy b. of the high opportunity cost of time c. it is costly to use land for waste disposal d. high wages in the waste disposal industry discourages repairs e. low wages in the repair industry encourages disposal
In the short run, a perfectly competitive firm will shut down if:
a. price is less than average cost. b. marginal revenue is equal to marginal cost. c. total revenue is less than total variable cost. d. total revenue is equal to total cost.
If real disposable income increases from $110,000 to $120,000 and consumption increases from $108,000 to $114,000, the marginal propensity to consume is:
A. 0.40. B. 0.60. C. 0.94. D. 1.60.