A competitive firm would benefit from charging a price below the market price because the firm would achieve (i) higher average revenue. (ii) higher profits. (iii) lower total costs
a. (i) only
b. (ii) and (iii) only
c. (i), (ii), and (iii)
d. None of the above is correct.
d
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The federal funds rate is a better target for the Fed when
A) the link between reserves and spending is strong. B) there is a lot of variation in the demand for reserves that isn't related to changes in spending. C) changes in interest rates stabilize the economy. D) bank reserves are very stable.
If quantity supplied is either greater or less than the equilibrium quantity, then all of the following are true except:
a. total loss of surplus will depend on the shape of the demand and supply curves. b. the resulting loss of consumer surplus will depend on the price of the good. c. total loss of surplus will depend on the price of the good. d. there will be an inefficient allocation of resources.