A firm facing a horizontal demand curve
A. cannot affect the price it receives for its output.
B. always produces at an output at which P = MR.
C. faces perfectly elastic demand for its product.
D. All of the responses are correct.
Answer: D
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Which of the following has NOT changed much as a percent of GDP over the last twenty years for the United States?
i. the official settlements account ii. the capital and financial account iii. the current account A) ii only B) ii and iii C) iii only D) i only E) None of the above answers is correct because all three have had large swings over the last 20 years.
If firms make agreements that reduce the amount of competition in a market,
a. the market price usually falls b. they would face penalties under antitrust legislation c. mergers will result d. there must be diseconomies of scale in the industry e. they would face penalties under contract law