Perfect competition ________ a fair outcome ________
A) achieves; because both the fair rules and fair results conditions are met
B) achieves; because total surplus is maximized
C) does not achieve; because entrepreneurs only earn a normal profit
D) does not achieve; because firms must be price takers
E) may achieve; if average total costs are minimized
A
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Which of the following will hold true if the market for cameras is in equilibrium at a price of $40?
A) The quantity of cameras produced will equal the quantity of cameras bought in the market. B) Sellers of cameras will have an incentive to charge a price higher than $40. C) Buyers of cameras will want to buy fewer cameras than they are purchasing at equilibrium. D) If the cost of producing cameras falls below $40 per camera, all sellers will stop supplying cameras.
When firms price their products by adding a percentage markup to their average costs of production, this is called
A) cost-plus pricing. B) rounding up. C) break-even pricing. D) average cost pricing.