Under Both Perfect Competition and Monopoly, a Firm

question 69

Multiple Choice

Under both perfect competition and monopoly, a firm:

• A) is a price taker.
• B) is a price maker.
• C) will shut down in the short-run if price falls short of average total cost.
• D) sets marginal cost equal to marginal revenue.

Identify factors influencing the marginal utility of goods and services.

Analyze the impact of diminishing marginal utility on consumption decisions.

Understand and apply the concept of budget constraints in consumer choice analysis.

Examine the characteristics of normal and inferior goods in response to income and price changes.

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Definitions:

Misinformation Effect

A memory phenomenon in which a person's recall of an event becomes less accurate due to the introduction of misleading information.

Procedural Memory

Procedural memory involves the long-term memory of how to perform different actions and skills, essentially knowing "how" to do things, operating mostly at an unconscious level.

Long-Term Memory

A type of memory capable of storing an unlimited amount of information for periods ranging from a few days to a lifetime.

Declarative Memory

The aspect of human memory that involves the recall of facts and events.