In a perfectly competitive market, the price of good A is $2. If a firm decides to raise its price to $2.50, it will OA) be unable to sell 20 percent of good A that it produces. B) be able to increase the quantity sold. OC) realize an increase in profits of $.50 per unit. OD) be unable to sell any quantity of good A that is produced.
In a perfectly competitive market, the price of good A is $2. If a firm decides to raise its price to $2.50, it will OA) be unable to sell 20 percent of good A that it produces. B) be able to increase the quantity sold. OC) realize an increase in profits of $.50 per unit. OD) be unable to sell any quantity of good A that is produced.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:In a perfectly competitive market, the price of good A is $2. If a firm decides to raise
its price to $2.50, it will
OA) be unable to sell 20 percent of good A that it produces.
OB) be able to increase the quantity sold.
C) realize an increase in profits of $.50 per unit.
OD) be unable to sell any quantity of good A that is produced.
Question 37
[
A firm operating as a monopoly has no competitors, offers a product for which there
are no close substitutes, and enjoys the benefits of significant barriers to entry.
Which of the following is true?
OA) It could experience a loss just like any other firm.
I
OB)
It will earn above-normal profits as long as its average-total-cost curve lies
above the demand curve.
C) A monopoly firm is guaranteed above-normal profits in the long run.
Om
rd for baric economic principles
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