Based on the graph above, we would expect this firm to sell:
A. Q1 units at a price of C.
B. Q1 units at a price of B.
C. Q2 units at a price of C.
D. Q2 units at a price of B.
Answer: B
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In the short run, the monopolistic competitor is just like the perfect competitor in that
A) equilibrium is determined by setting price equal to marginal cost. B) either type of firm can earn economic profits, experience economic losses, or break even in the short run. C) each equates marginal revenue and marginal cost in order to maximize profits, with the result that price exceeds marginal revenue. D) new firms enter in the short run when firms are making profits.
If an economy is operating at a point inside the production possibilities curve,
What will be an ideal response?
The unintended consequences of the federal deregulation of the interest paid depositors in the savings and loans was
A. increasing the interest rates in the national money market. B. increasing the amount of the loss on existing loans. C. allowing management to make riskier loans. D. affecting the interest rates on existing long term loans.
Explain how supply and demand create equilibrium in the marketplace
What will be an ideal response?