What is one reason perfectly competitive firms wish to be ever more efficient?
A) Individual firms are awarded by the tax code to be more efficient.
B) Individual firms can better control their costs than the price they can charge.
C) Individual firms can better control their costs than their output levels.
D) Individual firms don't need to be efficient; government policies do not reward efficiency.
B
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Suppose the short-run production function is q = 10 ? L. If the wage rate is $10 per unit of labor, then AFC equals
A) 0. B) 1. C) 10/q. D) It cannot be determined from the information provided.
All of the following are sunk cost investments that precommit an incumbent to aggressively defend market share and the cash flow prior to threatened entry except
a. reputational investments in company logos (e.g., Beatrice) b. automobile showrooms c. retail displays which hold only L'eggs egg-shaped hosiery packages d. neon signage for an independently owned Krispy Kreme store e. excess capacity in a declining industry