One reason the demand curve slopes ________ is that as prices fall ________.
A. upward; fewer people find that the price is now less than their reservation price.
B. downward; fewer people find that the price is now less than their reservation price.
C. downward; more people find that the price is now less than their reservation price.
D. upward; more people find that the price is now less than their reservation price.
Answer: C
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The table above gives the cost of producing T-shirts. When 5 T-shirts are produced, the average fixed cost is ________ and the average variable cost is ________
A) $4; $10 B) $10; $6 C) $5; $3 D) $4; $6
At the profit-maximizing level of output for a perfectly competitive firm
A) average revenue equals average variable cost and price equals marginal cost. B) marginal revenue equals marginal cost and average total cost equals average fixed cost. C) price equals marginal cost. D) price equals average revenue and marginal cost equals average variable cost.