In which of the following ways is a monopolistically competitive firm like a perfectly competitive firm?
A. Short-run economic profits are always positive.
B. Long-run economic profits are negative.
C. Long-run economic profits are positive.
D. Long-run economic profits are equal to zero.
Answer: D
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The firm in the figure above is in monopolistic competition. The firm has
A) no excess capacity. B) excess capacity of 10 units. C) excess capacity of 20 units. D) excess capacity of 30 units.
Neoclassical economists who focus on potential GDP as the primary determinant of real GDP argue that the long-run aggregate _______________ curve is located at potential GDP.
a. demand b. supply c. production d. labor
Which of the following is an endogenous variable in the Three-Sector-Model?
a. A change from flexible to fixed exchange rates b. Wars c. Domestic quantity of real credit per time period d. Oil prices e. All of the above are endogenous
A negative income tax system would
a. make taxes more regressive. b. sever the link between tax policy and income distribution. c. collect from high-income households and give transfers to low-income households. d. eliminate progressive tax rates.