The difference between a perfectly competitive firm and a monopolistically competitive firm is that a monopolistically competitive firm faces a:
A. horizontal demand curve and price exceeds marginal cost in equilibrium.
B. downward-sloping demand curve and price exceeds marginal cost in equilibrium.
C. horizontal demand curve and price equals marginal cost in equilibrium.
D. downward-sloping demand curve and price equals marginal cost in equilibrium.
Answer: B
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A perfectly competitive firm should continue to expand output until
A. total revenue exceeds total costs. B. total revenue exceeds variable costs. C. marginal revenue equals marginal costs. D. average revenue equals variable costs.
As the slope of the aggregate supply curve increases, this indicates that
a. the economy is getting close to potential GDP. b. the economy is reducing employment. c. inflation will be less of a problem. d. output is falling.
Large federal budget deficits _____
Fill in the blank(s) with the appropriate word(s).
In the market for pollution permits, the total supply of permits is:
A. perfectly inelastic. B. perfectly elastic. C. determined by the Chicago Board of Trade. D. always equal to the demand for permits.