A profit-maximizing firm in a monopolistically competitive market is characterized by which of the following?
a. average revenue exceeds marginal revenue
b. marginal revenue exceeds average revenue
c. average revenue is equal to marginal revenue
d. revenue is always maximized along with profit
a
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A chemical factory and a fishing club share a lake. Producing chemicals creates water pollution that harms the fish. Initially the lake is owned by no one
Keeping in mind the Coase theorem, suppose transactions costs are low and the fishing club is given ownership of the lake. Compared to the situation with no property rights, the quantity of chemicals produced A) will decrease. B) will stay the same. C) will increase. D) changes, but the direction of the change is ambiguous.
Trade restrictions are often motivated by a desire to save domestic jobs threatened by competition from imports. Which of the following counter-arguments is made by economists who oppose trade restrictions?
A) Trade restrictions benefit consumers in the short run but not in the long run. B) Statistics show that trade restrictions actually do not save jobs. C) Consumers pay a high cost for jobs saved through trade restrictions. D) Trade restrictions have a limited impact because most Americans prefer domestic goods over imports.
In the four-quadrant diagram of the specific factors model, the graph in the upper left quadrant is a country's
A) production function for food. B) production possibility frontier. C) labor allocation constraint. D) production function for cloth. E) labor supply curve.
The largest expenditure component in the U.S. is investment expenditures
Indicate whether the statement is true or false