TRUE OR FALSE Producer surplus from a unit of output is the difference between t
ID: 1237317 • Letter: T
Question
TRUE OR FALSEProducer surplus from a unit of output is the difference between the market price and the seller's cost of producing that unit.
When positive externalities are present, it leads to an underallocation of resources in that area relative to that which is socially desirable.
If the price elasticity of demand coefficient equals 2, this means a 10 percent increase in price will result in a 20 percent decrease in the quantity demanded.
The principle of diminishing marginal returns says that as more and more units of a variable resource are added to a set of fixed resources, the resulting additions to output will become increasingly smaller and, eventually, larger.
The average fixed cost remains constant even in the long run.
Training and education typically are necessary to assist people harmed by creative destruction.
A cartel attempts to increase profits in the industry by limiting the production of each member.
Under conditions of perfect competition, AR always equals MR.
Economic profit always exceeds accounting profit.
The period of time that is too short for the firm to change the quantity of certain resources used in production, known as fixed inputs, is called the short run.
One would expect to observe a diminishing marginal product of labor when crowded office space reduces the productivity of new workers.
The market demand curve in a perfectly competitive industry is downward sloping, while the demand curve faced by an individual perfectly competitive firm is horizontal.
Economic profits in a perfectly competitive industry will encourage entry of new firms, which will shift the market supply curve to the right.
Perfectly competitive firms earn zero economic profit in the long run.
As an industry's output increases, the industry's demand for the inputs that it uses will also increase.
When faced with an economic loss, a competitive firm will exit the industry in the long run.
Regardless of the demand for its product, a monopolist will be able to earn positive economic profits.
Explanation / Answer
Producer surplus from a unit of output is the difference between the market price and the seller's cost of producing that unit. False
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