Since the demand curve faced by a monopolistically competitive firm is downward sloping,
a. the firm is a price-taker in the short run
b. in the long run there will be excess capacity
c. the output decisions of one firm will influence profits of all other firms
d. the product in the market is viewed by consumers as being standardized
e. the ATC curve is U-shaped
B
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The demand for science fiction novels is elastic. When prices decrease from $10 to $6.50 per novel, total revenue will
a. not change. b. decrease. c. increase. d. either increase or stay the same.
If airlines give passengers under the age of 10 a 25% discount, then this is an example of price discrimination.
Answer the following statement true (T) or false (F)
A carbon tax placed on a fossil fuel:
A. is a pollution tax based on the carbon content of the fuel. B. is a form of marketable pollution permit. C. is often used in conjunction with command-and-control carbon policies. D. will not change the price of the fossil fuel taxed.
A negative externality exists when the actions of one party impose costs on a second party.
Answer the following statement true (T) or false (F)