A monopolistically competitive firm can raise its price somewhat without fear of great change in unit sales because
A. Of product differentiation and brand loyalty.
B. Of the gap in its marginal revenue curve.
C. Its demand curve is horizontal.
D. The demand for its product is typically very price-elastic.
Answer: A
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Firms exit a competitive market when they incur an economic loss. In the long run, this exit means that the economic losses of the surviving firms
A) increase. B) decrease until they equal zero. C) decrease until economic profits are earned. D) do not change. E) might change but more information is needed about what happens to the price of the good as the firms exit.
Price controls:
a. are always popular with consumers because they lower prices. b. create shortages. c. increase producer surplus because firms can now sell a greater quantity of a good at a lower price. d. are necessary to preserve equity.
If a proprietorship converts to a corporation form of business organization, it gives up control of day-to-day operations to the
a. bondholders b. shareholders c. owners d. management e. board of directors
Which of the following is most likely to lead to an increase in the rental price of apartments near your campus?
a. lower property taxes on apartment buildings b. an unexpected increase in enrollment at your college c. lower prices for the bricks used in the construction of apartments d. the building of a new large dormitory on the college campus