Costume jewelry is produced in a monopolistically competitive market. One producer finds that MR = MC = $3 when output is 700 necklaces. An economist studying this information can conclude that:
A. the producer is charging a price of $3.
B. economic profit is $2,100.
C. the producer charges a price greater than $3.
D. new firms will want to enter.
Answer: C
You might also like to view...
The market for unskilled labor is illustrated in the figure above. The market is in equilibrium and then a minimum wage of $3 per hour is imposed. Employment will decrease by
A) 0 hours. B) 10 million hours per year. C) 20 million hours per year. D) 30 million hours per year.
Capital is to investment as
a. hard is to soft. b. a flow is to a stock. c. a stock is to a flow. d. paper is to metal.
The "investment" component of aggregate demand will include all of the following except
a. expenditures of business firms on new plants. b. expenditures of business firms on new equipment. c. resales of existing physical assets. d. household spending on new homes.
An artificially scarce good is:
A. not rival in consumption, but excludable. B. rival in consumption, but not excludable. C. rival in consumption and excludable. D. not rival in consumption and not excludable.