Suppose Wave detergent is sold in a monopolistically competitive market. If the price of Wave detergent is currently $6, and the average cost of producing Wave is $4, in the long run we can expect:
A. firms to enter the detergent market and sell products similar to Wave, shifting the demand curve for Wave to the left.
B. firms to enter the detergent market and sell product similar to Wave, shifting the demand curve for Wave to the right.
C. the producers of Wave to go out of business.
D. the producers of Wave to earn economic profits greater than zero.
Answer: A
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Prices for industrial commodities such as steel rods or machine tools are
A) heavy prices. B) custom prices. C) auction prices. D) sticky prices.
Which of the following statements about the characteristics of debt and equity is FALSE?
A) They can both be long-term financial instruments. B) They can both be short-term financial instruments. C) They both involve a claim on the issuer's income. D) They both enable a corporation to raise funds.
Suppose a monopsonist hires its second worker and this person has a marginal labor cost of $75 per day. If the wage rate is now $62.50 per day, what was the wage rate of the first worker before the second was hired?
a. $40 b. $45 c. $50 d. $55 e. $60
In a perfectly competitive market, consumer surplus typically is
A) positive. B) negative. C) zero. D) undefined.