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Author Question: In a perfectly competitive market, if market price is lower than the average total cost of ... (Read 107 times)

lidoalex

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  • Posts: 538
on: Jun 29, 2018
In a perfectly competitive market, if market price is lower than the average total cost of production:
 
  A) new firms will enter the market.
  B) existing firms will leave the market.
  C) all existing firms will earn positive economic profits.
  D) all existing firms will earn zero economic profits.

Question 2

Which of the following does a social planner necessarily need to know to restore efficiency in a monopoly market?
 
  A) The monopolist's marginal costs only
  B) The buyers' demand for a close substitute of the product sold in the market
  C) The monopolist's marginal revenue and the tax levied on the sale of the good
  D) The monopolist's marginal costs and the buyers' willingness to pay for the good


daiying98

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  • Posts: 354
Reply #1 on: Jun 29, 2018
Answer to Question 1

B

Answer to Question 2

D


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