Under perfect competition, the efficient level of output is produced because
A. price equals marginal cost.
B. government regulates the output level that must be produced.
C. firms earn only a normal profit in the long run.
D. firms can earn an economic profit in the long run.
Answer: A
You might also like to view...
Rent controls can result in
a. deteriorating or abandoned buildings b. strong incentives to oust protected tenants c. payments to motivate tenants to move out d. benefits to rich people who get a windfall from low rents e. All of the answers are correct.
In order to survive, cartels must be able to enforce contracts. However, when a cartel is trading in an illegal commodity:
a. it can use the judicial system to enforce contracts. b. it relies on altruism of members to enforce contracts. c. it is inherently stable because the market is underground. d. violence becomes a means of contract enforcement. e. authorities are effective in preventing the trade.