THE SUPPLY CURVE OF A PERFECTLY COMPETITIVE FIRM IS IDENTICAL TO ITS
A. total cost B. marginal cost ✓ C. fixed cost D. variable inputs The answer to the question is: B. marginal cost In a perfectly competitive market, firms are price takers, meaning they have no control over the market price and must accept…
THE SHAPE OF THE LONG-RUN AVERAGE COST CURVE IS BEST EXPLAINED BY THE
A. law of diminishing returns B. law of returns to scale ✓ C. cost of fixed inputs D. cost of variable inputs The answer to the question is: B. law of returns to scale The shape of the long-run average cost (LRAC) curve is…
A MOVEMENT ALONG THE SAME DEMAND CURVE IS CAUSED BY THE
A. price of the product ✓ B. price of other products C. income of the consumer D. taste of the consumer The answer to the question is: A. price of the product A movement along the same demand curve is caused by the price…
IN PERFECTLY ELASTIC SUPPLY, THE SUPPLY CURVE
A. is vertical B. is horizontal ✓ C. slopes downward D. slopes upward The answer to the question is: B. is horizontal In perfectly elastic supply, the supply curve is horizontal. This means that the quantity supplied remains constant regardless of changes in price.…