In the long-run equilibrium for a perfectly competitive firm, price equals which of the following?
a. price.
b. minimum short-run average total cost.
c. short-run marginal cost.
d. All of these.
QUESTION 2Goods with few available substitutes tend to have inelastic demand curves.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 3In long-run equilibrium for a perfectly competitive firm, price equals which of the following?
a. Economies of scale.
b. Minimum short-run average total cost.
c. The sum of each short-run marginal cost curve.
d. All of these.
QUESTION 4The fewer the substitutes for a good the greater will be the value of the price elasticity of demand coefficient.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 5Which of the following statements is true?
a. To maximize profits, a firm must maximize total revenue.
b. In long-run equilibrium, a competitive firm produces at the point of minimum average total cost.
c. In the short-run, a perfectly competitive firm produces where total cost is minimum.
d. In the short-run, a perfectly competitive firm will close down whenever price is less than average total cost.
QUESTION 6Other factors held constant, if there are few close substitutes for a good, demand is more elastic for it.
a. True
b. False
Indicate whether the statement is true or false