In reference to the long-run firm competitive equilibrium diagram, which of the following statements is INCORRECT?
A) In the long run, the firm has no incentive to alter its scale of operations.
B) Because profits must be zero in the long run, the firm's short-run average costs (SAC) must equal P at Qe, which occurs at minimum SAC.
C) In the long run, the firm operates where price, marginal revenue, marginal cost, short-run minimum average cost, and long-run minimum average cost all are equal.
D) In the long run, this firm must be part of a constant-cost industry, because its marginal revenue curve is perfectly elastic.
D
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To say that a price floor is binding is to say that the price floor
a. results in a shortage. b. is set below the equilibrium price. c. causes quantity supplied to exceed quantity demanded. d. All of the above are correct.
Frannie spends her income on rice and beans. At her optimum, Frannie's
a. utility from consuming rice is equal to her utility from consuming beams. b. marginal utility of rice is equal to her marginal utility of beans. c. marginal utility per dollar spent on rice equals her marginal utility per dollar spent on beans. d. marginal rate of substitution is equal to 1.