Which of the following functions is not performed by prices in a free market?
a. guiding the allocation of resources
b. conveying information about the marginal cost of production
c. making the distribution of income more equitable
d. replacing the need for governmental supervision of production
c
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Gasoline prices in the United States decreased significantly between 2008 and 2009. A decrease in the price of gasoline, holding other things constant, will cause which of the following to occur?
A) increase the demand for gasoline. B) decrease the demand for gasoline. C) increase the quantity of gasoline demanded. D) decrease the quantity of gasoline demanded.
A firm in competitive price-taker market is maximizing profit at Q = 3,000 . Then its fixed cost increases. The profit-maximizing output is now
a. greater than 3,000 and profit decreases b. less than 3,000 and profit decreases c. greater than 3,000 and profit is unchanged d. equal to 3,000 and profit decreases e. equal to 3,000 and profit increases