The process of entry and exit into a monopolistically competitive market causes:
A. the firm's demand curve to shift left and/or right.
B. the firm's marginal cost curve to shift straight up and/or down.
C. the firm's supply curve to shift left and/or right.
D. the firm's average total cost curve to shift left and/or right.
Answer: A
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A factory produces 1,000 radios a year, AVC = $10 and TFC = $5,000. The factory’s TC
A. equals $15. B. equals $5,005. C. equals $15,000. D. cannot be determined from the information given.
In the short run, all costs are variable
a. True b. False Indicate whether the statement is true or false
A bank allows us to diversify risk because it has a:
A. small amount of borrowers and savers, so it can connect the optimal saver to the best-matched borrower. B. big pool of borrowers and savers, so the risk of repayment is spread among many. C. big pool of borrowers, but not many savers, so it can choose the riskiest person to borrow from. D. small amount of borrowers, but many savers, so it can combine savings to make larger loans.
Exhibit 2-4 Production possibilities curve data A B C D E Capital goods 0 10 20 30 40 Consumer goods200 180 140 80 0 According to the data in Exhibit 2-4, a total output of 140 units of consumer goods and 10 units of capital goods would:
A. be unobtainable in this economy. B. be an efficient way of using the economy's scarce resources. C. result in the maximum use of the economy's labor force. D. result in a less than maximum rate of growth for this economy.