Question 37(Multiple Choice Worth 1 points)

(03.06 MC)

If the marginal cost equals the marginal revenue at a price higher than the average total cost at the profit-maximizing output, what will happen to a perfectly competitive market?

Other firms will enter the market, and the price will lower until profits are eliminated.

Some firms will leave the market, driving costs up until profits are eliminated.

Decreasing competition will drive marginal costs up until they equal average total costs.

Consumer demand will decrease and lower the price until profits are eliminated.

Individual firms in the market will increase output to enjoy increasing profits.

Question 30(Multiple Choice Worth 1 points)

(02.09 MC)

Imposing an import quota has which of the following effects?

Raises tax revenue; lowers domestic consumption; increases domestic production

Increases domestic consumption; increases domestic production

Increases domestic supply; decreases domestic demand

Decreases domestic supply; increases domestic quantity demanded

Increases domestic quantity supplied; decreases domestic consumption