If a perfectly competitive industry is in long-run equilibrium, then
A) price equals average cost.
B) price is greater than average cost and equal to marginal cost.
C) all firms earn the same accounting profits.
D) marginal cost is less than average cost.
A
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Suppose a negative externality exists in a market. If transactions costs are low and parties are willing to bargain then, according to the Coase theorem
A) an efficient solution can be reached only if property rights are assigned to the polluters. B) government intervention is critical to reach an efficient solution. C) an efficient solution can be reached only if property rights are assigned to the victims of the pollution. D) an efficient solution can be reached regardless of the initial assignment of property rights.
In a common-value auction
a. Every bidder knows the exact value of the item being auctioned b. Each bidder knows everyone else's value of the item c. The value of the item is different for all the bidders d. None of the above