Firms in monopolistic competition always will
A) make an economic profit.
B) set their price equal to their marginal cost.
C) set their price above their marginal cost.
D) produce at the minimum average total cost.
C
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If wages and prices adjust rapidly, we would expect expansionary monetary policy to be
A) more likely to affect the unemployment rate. B) more likely to reduce the natural rate of unemployment. C) less likely to affect the unemployment rate. D) less likely to result in a vertical short-run Phillips curve.
If the velocity of money (V) and real output (Q) were increasing at approximately the same rate, then: a. it would be impossible for monetary authorities to control inflation
b. monetary acceleration would not lead to inflation. c. inflation would be closely related to the long-run rate of monetary expansion. d. none of the above
Price elasticity of demand is a measure of the change in quantity demanded that results from a change in price
a. True b. False Indicate whether the statement is true or false
Constant returns to scale are associated with a:
A. horizontal short-run average cost curve. B. horizontal long-run average cost curve. C. downward-sloping short-run average cost curve. D. downward-sloping long-run average cost curve.