For an imperfectly competitive firm:
A. total revenue is a straight, upsloping line because a firm's sales are independent of product
price.
B. the marginal revenue curve lies above the demand curve because any reduction in price
applies to all units sold.
C. the marginal revenue curve lies below the demand curve because any reduction in price
applies to all units sold.
D. the marginal revenue curve lies below the demand curve because any reduction in price
applies only to the extra unit sold.
Answer: C
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The major reason the market demand curve for labor slopes downward is because:
a. at lower wage rates, workers are less willing to supply labor to the market. b. at lower wage rates, workers are more willing to supply labor to the market. c. of the law of diminishing marginal product d. of the law of diminishing marginal resource cost.
When Pigouvian subsidy is imposed on a market with a positive externality, total surplus:
A. decreases less than the increase in consumer surplus. B. increases less than the decrease to producer surplus. C. increases more than the increase in consumer surplus. D. decreases more than the decrease to producer surplus.