When a firm faces a downward-sloping demand curve, marginal revenue
A) must exceed price because the price effect outweighs the output effect.
B) must exceed price because the output effect outweighs the price effect.
C) is less than price because a firm must lower its price to sell more.
D) equals price because the firm sells a standardized product.
C
Economics
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A monopolistically competitive firm ________
A) can increase price without losing all of its business B) loses all of its business if it increases price slightly C) faces a perfectly elastic demand curve D) faces a perfectly inelastic demand curve
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If a college student stays home and watches a Netflix movie for $2 rather than going out to a $15 movie, this is an example of the
A) utility effect. B) value effect. C) substitution effect. D) income effect.
Economics