Suppose That in a Competitive Market the Equilibrium Price Is

question 365

Multiple Choice

Suppose that in a competitive market the equilibrium price is $2.50. What is marginal revenue for the last unit sold by the typical firm in this market?

• A)less than $2.50
• B)more than $2.50
• C)exactly $2.50
• D)The marginal revenue cannot be determined without knowing the actual quantity sold by the typical firm.

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Definitions:

New Product

A good or service that has recently been introduced to the market and was not available to consumers before.

Over-optimism

The tendency to overestimate the likelihood of positive outcomes in various situations, often affecting judgment and decision-making.

Huge Success

An achievement or outcome that significantly exceeds expectations or objectives, often measured in terms of profitability, popularity, or effectiveness.

Bubble

A bubble refers to a market condition where the prices of assets escalate rapidly beyond their fundamentally justified values due to investor expectations and exuberance, often followed by a sharp decline.