For most products, purchases tend to fall with decreases in consumers' incomes. Such products are known as

In which of the following situations will the profit of a perfectly competitive firm always increase with an increases in its output?

a. When price is greater than marginal revenue b. When price is less than marginal revenue c. When price is greater than marginal cost d. When price is less than marginal cost e. When price is equal to marginal cost

Prices direct economic activity in a market economy by

a. influencing the actions of buyers and sellers. b. reducing scarcity of the goods and services produced. c. reducing opportunity cost of goods and services produced. d. allocating goods and services in the most equitable way.