A perfectly competitive firm
A) sells a product that has perfect substitutes.
B) has a perfectly inelastic demand.
C) has a perfectly elastic supply.
D) Answers A and B are correct.
E) Answers A and C are correct.
A
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If firms' inventories exceed their planned inventories, firms
A) increase employment. B) increase GDP. C) increase production. D) increase income. E) decrease production.
According to the simple Keynesian model, when planned expenditure exceeds income
a. prices rise. b. unplanned inventory investment is negative. c. income falls. d. planned expenditure falls. e. both b and d.
When a firm's output level is high,
a. AVC dominates ATC so ATC begins to rise more rapidly b. AFC dominates ATC so AFC begins to rise more rapidly c. AFC dominates AVC so AFC begins to rise more rapidly d. ATC dominates MC so MC begins to fall more rapidly e. AVC dominates MC so MC begins to fall more rapidly
Under monopolistic competition, profits cannot persist because new firms will be attracted to the market
a. True b. False Indicate whether the statement is true or false