A monopolistically competitive firm differs from a perfectly competitive firm in the long run in that
A) the demand curve faced by a monopolistically competitive firm is downward sloping, while the demand curve faced by a perfectly competitive firm is horizontal.
B) profits are positive for a monopolistically competitive firm and zero for a perfectly competitive firm.
C) profits are zero for a monopolistically competitive firm and positive for a perfectly competitive firm.
D) marginal cost equals the market price for a monopolistically competitive firm but not for a perfectly competitive firm.
Answer: A
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Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher
When the interest rate is R, the formula for finding the future value of $M two years from now is
A) M (1 + R)2. B) M (1 + R2). C) M / (1 + R)2. D) M / (1 + R2).
The key issue in determining the efficiency of public versus private ownership of a monopoly is
a. the tendency for efficient management of publicly owned enterprises. b. the inability of private monopolies to get rid of managers that are doing a bad job. c. the propensity of private monopolies to generate excessive profits. d. how ownership of the firm affects the cost of production.
Persons who choose not to become informed on political and governmental matters because they feel that the costs of becoming informed exceed the benefits of becoming informed are
A) rationally ignorant. B) not acting in their own best interests. C) members of special interest groups. D) shortsighted.