The demand curve for the product of a perfectly competitive firm is
A) perfectly elastic.
B) perfectly inelastic.
C) elastic at high prices and inelastic at low prices.
D) identical to the elasticity of demand on the market demand curve.
Answer: A
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The equation of exchange states that the price level is equal to
A) the quantity of money. B) velocity of circulation multiplied by the quantity of money divided by real GDP. C) real GDP multiplied by the velocity of circulation divided by nominal GDP. D) the velocity of circulation.
Marginal cost is calculated for a particular increase in output by
A) dividing the change in total cost by the change in output. B) dividing the total cost by the change in output. C) multiplying the total cost by the change in output. D) multiplying the change in total cost by the change in output.