A perfectly competitive firm is producing 75 units of output. the market price is $7 and the firm's marginal cost is $8. the firm should:
a. lower its price
b. raise its price
c. increase production
d. decrease production
In an asymmetric market for used card, which of the following could be used to avoid a thin market?
a. offering money-back guarantees on plum used cars.
b. offering warranties on lemon used cars.
c. offering repair guarantees on lemon used cars.
d. used cars salesman
In the market for automobile insurance, asymmetric information occurs when:
a. insured drivers drive more safely than insured drivers.
b. insured drivers drive more recklessly than uninsured drivers.
c. drivers with greater risk purchase more automobile insurance.
d. automobile insurance is universal.