Which of the following statements correctly identifies a similarity between monopoly and perfect competition?
A) Entry is restricted in both market structures.
B) Price equals marginal cost in both market structures.
C) Production is expanded until marginal revenue equals marginal cost in both the market structures.
D) Firms face an upward sloping demand curve and a downward sloping marginal revenue curve in both the market structures.
C
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The figure above shows the marginal revenue and costs of a perfectly competitive firm. When 170 units are produced, the
A) firm has total revenue of $2,720. B) firm's total costs are less than $2,720. C) firm is making an economic profit. D) All of the above are true.
A new tax introduced by the government will: a. decrease disposable income
b. increase disposable income. c. lead to a reduction in government spending. d. lead to an increase in government spending. e. have no effect on disposable income.