If Figure 8.1 depicts the current situation for a monopolistically competitive firm, then in the long run we expect:
A. the firm to charge a price higher than P1.
B. the firm to produce and sell more than Q1.
C. the firm's average cost of production to rise above AC1.
D. the firm to earn higher economic profits.
Answer: C
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Fill in the blank: Since millions of people now use email as opposed to traditional "snail mail," the price elasticity of demand for the Post Office's first class letter service tends to ________
A) decrease B) increase C) increase in the short run but then decrease in the long run D) leave unchanged
Which of the following is not a method to internalize or adjust for externalities?
A. persuasion B. assignment of property rights C. unilateral transfers D. voluntary agreements
The existence of asymmetric information can give rise to adverse selection
a. True b. False
Which of the following nations experienced average rates of economic growth of less than 2 percent over the last 100 years or so?
a. Bangladesh b. Pakistan c. United Kingdom d. All of the above are correct.