Is monopolistic competition efficient? Explain. What is Edward Chamberlin's view about the efficiency of monopolistic competition?
What will be an ideal response?
Monopolistic competition is not efficient because a monopolistic competitive firm produces where price exceeds marginal cost and because in the long run a monopolistically competitive firm produces to the point at which average total cost is above minimum point of its average total cost curve. However, Chamberlin argued that the difference between the average cost of production for a monopolistic competitor and the minimum of average total cost represented the cost of producing differentiated products, which consumers value.
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The belief that having more of something makes you happier but in successively smaller increments is called
A) utilitarianism. B) diminishing marginal utility. C) the benefits-received principle. D) transcendentalism.
If a firm is currently equating MR and MC and product price = $24, AVC = $22, and ATC = $26, then in the long run this firm:
a. will continue to operate at a loss. b. will earn a positive profit. c. will go out of business. d. should increase output. e. should decrease price.
The United States was among the first of the modern industrial nations to establish a central banking system
a. True b. False Indicate whether the statement is true or false
Which of the following is a stock variable:
a. Income b. Money supply c. Investment d. Profits