If minimum efficient scale is small relative to the maximum potential market,
a. relatively large firms will have a cost advantage over relatively small firms
b. the market price will be low
c. relatively small firms will have a cost advantage over relatively large firms
d. the market price will be high
e. only one firm will survive in the long run.
C
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A firm is currently producing at the point where MC = MR. The situation for the firm at this point is P = $5, Q = 100, ATC = $6, AVC = $4.50. What do you recommend this firm do?
A) Increase production above the current output rate, because MC = MR at this rate of output. B) Continue to produce the current output rate, because P > AVC. C) Shut down, because AVC > P. D) Shut down, because ATC > P.
Neo-Keynesians believe that the market power exercised by unions, monopolies, and particular resource suppliers created the Phillips curve
Indicate whether the statement is true or false