Long-run equilibrium for firms in monopolistically competitive industries is similar to that for firms in perfect competition in that
A. price equals minimum possible average total cost.
B. price equals marginal cost.
C. marginal revenue equals average total cost.
D. price equals average total cost.
D. price equals average total cost.
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Suppose that the federal government had a budget deficit of $80 billion in year 1 and $10 billion in year 2, but it had budget surpluses of $140 billion in year 3 and $20 billion in year 4. Also assume that the government uses any budget surpluses to pay down the public debt. At the end of these four years, the Federal government's public debt would have
A) increased by $250 billion. B) decreased by $70 billion. C) decreased by $62.5 billion. D) increased by $70 billion.
For which of the following goods is the marginal benefit of search likely to be greatest?
a. a toaster b. an apple c. a radio d. a tube of toothpaste e. a color TV
Assume that one firm in a perfectly competitive market adopts a technological innovation that enables it to produce at a lower cost per unit than competing firms in the short run. Which of the following statements is correct?
a. The innovating firm will earn above-normal profit in the long run. b. All the competing firms will be forced to exit the market in the long run. c. This is an example of a decreasing cost industry. d. Competing firms will need to adopt the new technology in the long run in order to survive. e. Only new firms entering the industry with new-technology plants will be able to compete with the innovating firm.
(Consider This) Ticket scalping implies that:
A. event sponsors have established ticket prices at above-equilibrium levels. B. an event is not likely to be sold out. C. event sponsors have established ticket prices at below-equilibrium levels. D. the demand for tickets has fallen between the time tickets were originally sold and the event takes place.