The relationship between real GDP and potential GDP is that
A) real GDP always equals potential GDP.
B) real GDP never equals potential GDP.
C) real GDP fluctuates about potential GDP.
D) real GDP is always below potential GDP.
C
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The perfectly competitive firm:
A) makes its profit-maximizing decision only on the basis of output. B) faces a downward-sloping demand function. C) can influence market price only in a downward direction. D) cannot earn any economic profits because it faces a horizontal demand curve.
Which is NOT a necessary condition for price discrimination to exist?
A) The firm must face a downward sloping demand curve. B) The firm must identify buyers with different elasticities of demand. C) The firm must be able to prevent resale of the product or service. D) The firm must establish different prices to reflect marginal cost.