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Question
Under perfect competition, a firm that sets its price slightly above the market price would
A) make lower profits than the other firms, but the amount would depend on the elasticity of demand.
B) make a normal rate of return, but on reduced revenues.
C) lose all of its customers.
D) earn higher profits as long as the other firms continued to charge the market price.
Answer
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Related questions
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Q:
Refer to the above figure. At a price of $2 per gallon, there isA) a surplus of 20,000 gallons per month. B) a shortage of 40,000 gallons per month.C) a shortage of 80,000 gallons per month. D) a shortage of 60,000 gallons per month.
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Refer to the above figure. Other things being equal, when the government imposes a price floor at P2, then we would expectA) the quantity demanded is Q 2.B) a surplus will occur.C) price to decline until an equilibrium is achieved at P0.D) consumers to bid against each other for goods and force the price even higher.
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Maximum Feasible Hourly Production Rate ChenHollyUnits of Good X5040Units of Good Y25100Suppose that the opportunity cost of producing goods differs between two nations. We can correctly state thatA) the two nations should not specialize in the production of goods.B) specialization can lead to an increase in the production of all goods.C) specialization can lead to an increase in the consumption of all goods.D) neither country has a comparative advantage in the production of any good.
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Which of the following statements is FALSE?
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Assume that coffee and tea are substitutes. Given a downward sloping demand curve for tea, an increase in the price of tea will causeA) an increase in the demand for coffee. B) a decrease in the demand for coffee.C) a leftward shift of the demand curve for tea. D) a leftward shift in the demand for coffee.
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Discuss the relationship between world trade and world Gross Domestic Product (GDP) since the early 1950s.
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The United Statesʹ balance of payments is likely to improve whenA) there is an increase in political instability in other countries.B) the inflation rate in the United States rises relative to other countries.C) the American government increases its spending on foreign aid. D) American people want to invest more in foreign countries.