Which of the following is TRUE regarding a perfectly competitive firm?
A) The firm can charge a lower price than its competitors and thereby sell more output and increase its profits.
B) The firm always earns a normal profit.
C) The firm's marginal revenue continually decreases.
D) The firm's minimum efficient scale is small relative to the market demand.
D
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A liquidity trap is
a. the vertical portion of the LM schedule. b. the horizontal portion of the LM schedule. c. a situation where a given change in the money stock induces a large reduction in the interest rate. d. Both a and c e. Both b and c
Since producers must be compensated for the rising opportunity cost that accompanies increases in output,
a. the law of demand applies to most markets b. supply curves usually slope downward c. demand curves usually slope downward d. supply curves usually slope upward e. technical inefficiency would not exist in the long run