Whenever firms can freely enter and exit a market,
a. firms can never earn a profit.
b. prices will be the same for all firms in the market.
c. products will be identical for all firms in the market.
d. profits and losses play an important role in determining the size of the industry.
D
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The decision to undertake product development in monopolistic competition is made by comparing the
A) marginal benefit of product development to the marginal cost of product development. B) average revenue of product development to the average total cost of product development. C) total revenue of product development to the total cost of product development. D) firm's expenditure on product development to expenditures by competing firms.
Assume the table shown is for a hat factory, and shows the total production of hats given various numbers of employees. What is the marginal product of the fifth worker?
A. 40
B. 50
C. 30
D. 200
Refer to the above supply and demand graph. Point A represents the current equilibrium level of output of this product and point B represents the optimal level of output from society's perspective. If government decides to correct this spillover problem by subsidizing producers, then the:
A. demand curve will shift from D2 to D1. B. supply curve will shift from S1 to S2. C. supply curve will shift from S2 to S1. D. demand curve will shift from D1 to D2.
An increase in rent will ordinarily lead to
A. an increase in usage of land that was formerly idle. B. a decrease in total land employed. C. less-intensive usage of land. D. a decrease in the income of landlords.