A firm that operates in a perfectly competitive market
a. controls its own price, but accepts its output level as given
b. controls both its own price and its own output level
c. controls its own output level, but accepts its price as given
d. accepts both its output level and its price as given
e. controls its own price, its own output level, and its own costs
C
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A linear relationship
A) always has a maximum. B) always has a constant slope. C) always slopes up to the right. D) never has a constant slope.
The U.S. beer industry is characterized by market power for only a few firms, with the largest firm enjoying a 50% market share. One reason for this is economies of scale. Economies of scale means that:
a. as beer production increases, costs increase significantly. b. patents have allowed beer producers to have low costs of production. c. as beer production increases, the average total cost of production falls. d. if the industry were made perfectly competitive, the costs of production would fall.