4. True, false, or uncertain? Explain briefly but specifically.a. A perfectly competitive firm chooses q*by setting MR = MC.b. Supply becomes less elastic as the number of firms increases.c. An allocation must be Pareto efficient if MRS; = MRSk for all individuals j and k.d. Producer surplus is always at least as large as profit.e.The long run expansion path indicates the optimal combination of capital and laborfor any level of output.

A perfectly competitive market is a theoretical market in which there are many small firms selling…

4. True, false, or uncertain? Explain briefly but specifically. a. A perfectly competitive firm chooses q*by setting MR = MC. b. Supply becomes less elastic as the number of firms increases. c. An allocation must be Pareto efficient if MRS; = MRS for all individuals j and k.

4. True, false, or uncertain? Explain briefly but specifically. a. A perfectly competitive firm chooses q*by setting MR = MC. b. Supply becomes less elastic as the number of firms increases. c. An allocation must be Pareto efficient if MRS; = MRS for all individuals j and k.

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter3: Supply And Demand: Theory

Section3.2: Supply

Problem 2ST

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Question

4. True, false, or uncertain? Explain briefly but specifically.
a. A perfectly competitive firm chooses q*by setting MR = MC.
b. Supply becomes less elastic as the number of firms increases.
c. An allocation must be Pareto efficient if MRS; = MRSk for all individuals j and k.
d. Producer surplus is always at least as large as profit.
e.
The long run expansion path indicates the optimal combination of capital and labor
for any level of output.

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