In the long run, a monopolistically competitive firm:
a. will earn normal profits.
b. will earn excess profits.
c. will earn no profits.
d. will produce where marginal cost equals price.
Ans: c. will earn no profits.
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What will be an ideal response?
In a two-period model with default, if the market interest rate is low, then
A) default is more likely B) there is no effect on the nation's default decision. C) default is less likely. D) the income effect is larger than the substitution effect.
Private goods are those goods
A) that violate the principle of rival consumption. B) for which no public market exists. C) that can only be consumed by one individual at a time. D) to which the non-exclusion principle applies.
When a good is non-rivalrous, then there is zero marginal cost to adding an additional user
a. True b. False Indicate whether the statement is true or false