Under certain conditions, the slope of the marginal revenue product curve reflects the combined effects of diminishing marginal returns and a declining price of the product the firm sells. What are these conditions?
a. The firm must be a price searcher in both the product market and the resource market.
b. The firm must be a price searcher in the product market, regardless of whether it is a resource price searcher.
c. The firm must be a price searcher in the product market but not necessarily in a perfectly competitive resource market.
d. The firm must be a price searcher in a perfectly competitive product market.
e. The firm must operate in a decreasing-cost industry.
Question 2
The Clean Air Act of 1970
a. set up a depletion tax system
b. reduced air pollution standards
c. recognized air as a resource
d. established a system of transferable pollution rights
e. forbade producers to emit any pollutants into the air
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