The theory of monopolistic competition predicts that in long-run equilibrium a monopolistically competitive firm will:
a. operate at minimum long-run average cost.
b. overutilize its insufficient capacity.
c. None of these choices are correct.
d. produce at the level in which price equals long-run average cost.
d
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Market failure happens when a market does not generate the most efficient outcome
Indicate whether the statement is true or false
Appendix: Auctions are used in place of markets when the items traded are unique (e.g., a Ming vase or a right to drill for oil). Which of the following examples are typically sold using Vickrey auction methods?
a. For-sale-by-owner houses b. Household furnishings c. Items sold in Filene's Basement, with the price discounted after a certain date d. Vintage postage stamps
France has a higher natural rate of unemployment than the United States. This suggests that
a. France is at a higher point on its long-run Phillips curve and so has higher inflation than the United States. b. France is at a lower point on its long-run Phillips curve and so has lower inflation than the United States. c. France's Phillips curve is to the left of that of the United States, possibly because they have higher inflation. d. France's Phillips curve is to the right of that of the United States, possibly because they have more generous unemployment compensation.
______ is the expenditure needed to construct a building of equal utility to the existing building.
Fill in the blank(s) with the appropriate word(s).