In the long run, the main reason that a monopolist can earn positive economic profits while a perfectly competitive firm cannot is:
A. monopolists enjoy greater economies of scale.
B. there are no barriers to entry in a perfectly competitive market.
C. the monopolist faces an inelastic demand for its product.
D. perfectly competitive firms face greater opportunity costs.
Answer: B
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Using the above figure, the price facing the perfectly competitive firm in the long run will be
A) P1. B) P2. C) P3. D) P4.
Which of the following changes in the exchange rate represents a depreciation of the dollar?
a. 100 yen = $1 to 110 yen = $1 b. 1 yen = $.10 to 1 yen = $.08 c. 1 peso = $10 to 1 peso = $11 d. 200 francs = $10 to 250 francs = $10
Profit maximization can occur at some output level where marginal cost and marginal revenue are not equal
Indicate whether the statement is true or false
The impact of expansionary fiscal policy is weakened because of crowding out.
a. true b. false