When price falls in a perfectly competitive industry, each firm will
a. sell more output
b. sell the same amount of output but earn less economic profit
c. sell less output
d. raise its price
e. shut down production until price regains its former level
C
You might also like to view...
If the nominal interest rate is 8.25% and inflation rate is 3%, the real interest rate is ________
A) 5.25% B) 2.75% C) 1.25% D) 11.25%
The Coase theorem states that
a. under certain circumstances government intervention is not needed to reach efficient outcomes when an externality is present. b. government intervention is always required to reach an efficient outcome when an externality is present. c. government intervention cannot lead to an efficient outcome when an externality is present. d. only negative externalities can be resolved using government intervention.