How does a firm in monopolistic competition determine its price and quantity? What type of profit can it earn in the short run and the long run?
What will be an ideal response?
The firm produces where its marginal cost equals its marginal revenue. Then the price is determined from the demand curve and is the highest price at which people will buy the quantity produced. The firm can earn an economic, a normal profit, or suffer an economic loss in the short run. In the long run, the firm cannot earn an economic profit; it can only earn a normal profit.
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Riskless transactions to take advantage of profit opportunities due to a price differential or a yield differential in excess of transaction costs are called
A) differential actions. B) cash transactions. C) arbitrage. D) forward transactions.
A rise in wage rates
A) causes the AD curve to shift leftward. B) causes the short-run aggregate supply (SRAS) curve to shift rightward. C) does not affect the present position of the SRAS curve. D) causes the AD curve to shift rightward. E) causes the SRAS curve to shift leftward.
Which of the following is a major implication of the invisible hand concept?
What will be an ideal response?
About ____ percent of business R&D spending is for basic research
A. 1 B. 5 C. 20 D. 75