A monopolistically competitive firm is producing at an output level in the short run where average total cost is $4.50, price is $4, marginal revenue is $2.50, and marginal cost is $2.50. This firm is operating
A. with a loss.
B. at the break-even point.
C. with positive profits.
D. at a nonoptimal level of output.
Answer: A
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Refer to Figure 11-11. In the short run, if the firm sells fewer than 5,000 picture frames per month
A) it should produce with the scale of operation associated with ATCc. B) it should produce with the scale of operation associated with ATCa. C) it should produce with the scale of operation associated with ATCb. D) it will experience constant returns to scale.
Producer groups tend to lobby for
A) price floors. B) price ceilings. C) quantity quotas. D) taxes.
Identify the largest and smallest components of GDP
Neoclassical growth theory placed emphasis on two resources:
A) capital and entrepreneurship. B) natural resources and capital. C) capital and labor. D) labor and entrepreneurship. E) labor and natural resources.