Which of the following is TRUE about a firm in monopolistic competition in the long run?
A) P = MC
B) P = MR
C) ATC = MC
D) P = ATC
E) MC = ATC
D
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A monopolist faces an upward-sloping marginal cost curve. Its profit-maximizing quantity will be
a. at the minimum point of the marginal cost curve b. less than the (total) revenue-maximizing quantity c. equal to the (total) revenue-maximizing quantity d. in the unit elastic segment of the demand curve e. in the inelastic segment of the demand curve
According to the utility model of consumer demand, the demand curve is downward-sloping because of the law of:
a. diminishing marginal utility. b. diminishing consumer equilibrium. c. consumer equilibrium. d. diminishing utility maximization.
A sudden technological breakthrough in an economy would:
a. have no impact on real GDP. b. cause aggregate demand to fall. c. lower the natural rate of unemployment. d. increase the price level. e. cause aggregate supply to rise.
An externality is defined as
a. an opportunity cost that is not considered, which causes inefficiency. b. a social cost that affects parties external to a transaction. c. a transaction which imposes a loss on one of the parties involved. d. a "cost of doing business" that cannot be allocated to any particular good. e. the increase in cost associated with increased production.