For a firm in a perfectly competitive industry
A) the demand curve is unitary elastic throughout.
B) marginal revenue and product price are equal at every level of output.
C) the price elasticity of demand is zero.
D) more output can be sold only if the firm unilaterally lowers its product price.
B
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Economists assume people behave rationally, which means that people
A) never make a mistake. B) do not intentionally make decisions that make themselves worse off. C) have the necessary information to always make correct decisions. D) always understand the consequences of their decisions.
A deadweight loss occurs as a result of a per-unit tax because: a. the government spends tax dollars less efficiently than do private citizens
b. there is a decline in output for units for which the marginal benefit exceeds the marginal cost. c. taxes cause an overproduction of output relative to the socially efficient level or production. d. a surplus is created.