A profit-maximizing firm in a ________ market structure behaves much like a monopolistic firm in the short run.
A. Cournot duopoly
B. perfectly competitive
C. monopolistically competitive
D. All of the above are correct.
Answer: C
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The figure above shows the market for umbrellas in Sunville. When the market for umbrellas in Sunville is in equilibrium, what is the total deadweight loss?
A) $2,000 B) $800 C) $0 D) 600 umbrellas
Why are selling costs high in monopolistic competition?
What will be an ideal response?
When we solve the firm's dual production problem (i.e., maximize output subject to a cost constraint) by the method of Lagrange multipliers, the optimal value of the Lagrange multiplier equals the:
A) marginal product per unit cost of each variable input. B) marginal product of capital. C) marginal product of labor. D) marginal cost of production.
Increasing returns to scale in production means
A) more than 10% as much of all inputs are required to increase output 10%. B) less than twice as much of all inputs are required to double output. C) more than twice as much of only one input is required to double output. D) isoquants must be linear.