Which of the following statements is true for both Microsoft and a locally owned restaurant? Select one: a. Both seek to maximize profits. b. Both confront perfectly elastic demand for their products. c. Neither firm is able to influence the price of their products. d. Both are perfect competitors.
Added by Kurt J.
Step 1
a. Both seek to maximize profits. - Microsoft is a for-profit corporation, so it seeks to maximize profits. - A locally owned restaurant is also typically a for-profit business, so it also seeks to maximize profits. b. Both confront perfectly elastic demand for Show more…
Show all steps
Your feedback will help us improve your experience
Jennifer Stoner and 76 other Microeconomics educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Key Concepts
Recommended Videos
Which of the following is true for perfect competition, monopolistic competition, and monopoly? a. The product of all firms is homogeneous. b. Firms will earn zero economic profits in the long run. c. Short-run profits are maximized when marginal cost equals marginal revenue. d. All of the above.
Jennifer S.
These are statements comparing monopoly with perfect competition. Which of the following statements is/are false? Select all that apply. A. A a perfectly competitive industry faces a horizontal straight line demand curve whereas a monopoly faces a downward sloping demand curve. B. A perfectly competitive firm faces a small fraction of the industry demand curve whereas a monopoly faces the entire market demand curve. C. A perfectly competitive firm can only set quantities; a monopoly can set both price and quantity, although once it chooses a price (quantity), the other variable, quantity (price), is determined by the demand curve it faces. D. A perfectly competitive equilibrium is efficient; a monopoly equilibrium is inefficient. E. A perfectly competitive firm necessarily earns zero economic profit in a long run equilibrium; a monopoly typically earns a super-normal profit in a long run equilibrium.
Which of the following is a characteristic shared by a perfectly competitive firm and a monopoly? Select one: a. Each must lower its price to sell more output. b. Each sets a price for its product that will maximise its revenue. c. Each maximises profits by producing a quantity for which marginal revenue equals marginal cost. d. Each maximises profits by producing a quantity for which price equals marginal cost. e. Each minimises average total cost by producing a quantity for which price equal average revenue
Andrew D.
Recommended Textbooks
Principles of Economics
Principles of Microeconomics for AP® Courses
Economics
Transcript
18,000,000+
Students on Numerade
Trusted by students at 8,000+ universities
Watch the video solution with this free unlock.
EMAIL
PASSWORD