A competitive firm facing a perfectly elastic demand curve can:
a. increase price without losing any sales
b. sell all of its output at any price it chooses.
c. sell all of its output at the market price.
d. sell more output only by reducing its price.
c
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Which of the following is the best example of scarcity?
A) The Talking Teddy is a surprise holiday hit, resulting in long lines of consumers trying to purchase the limited number of available Teddies. B) Fred only gets a 10-hour lunch break and each day must decide between working out at the gym or socializing with his colleagues. C) The local market's buy-one-get-one-free sale on strawberries results in more people wanting the berries than producers are able and willing to supply. D) There is a bumper crop of strawberries, and stores have more berries than they can sell.
Middlemen are individuals who
a. add to the buyer's expense without performing a useful function. b. add to the seller's cost without performing a useful function. c. provide services that reduce the cost of transactions and help achieve additional gains from trade. d. act as a middle person between the top management of a business firm and the hourly employees who actually produce the goods and services.