Refer to Figure 13-18. Which of the following statements is true?
A) Da represents the long-run demand curve facing a monopolistic competitor in a constant-cost industry while Db depicts the long-run demand curve in an increasing-cost industry.
B) Da represents the long-run supply curve in a perfectly competitive, constant-cost industry while Db depicts the long-run demand curve facing a monopolistic competitor in a decreasing-cost industry.
C) Da represents the long-run demand curve facing a perfect competitor while Db depicts the long-run demand curve facing a monopolistic competitor.
D) Da represents the long-run demand curve facing a monopolistic competitor in a constant-cost industry while Db depicts the demand curve in the short run.
Answer: C) Da represents the long-run demand curve facing a perfect competitor while Db depicts the long-run demand curve facing a monopolistic competitor.
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Economists argue that individuals should continue to consume until total benefit equals total cost
Indicate whether the statement is true or false
Perfect competition and monopolistic competition are similar in that firms in both types of market structure will.
A) act as price takers. B) produce a level of output where price equals marginal cost. C) earn zero profit in the long run. D) act as price setters.
Which fundamental question about a competitive market system primarily focuses on technological progress and capital accumulation?
A. Who will get the goods and services? B. How will the goods and services be produced? C. How will the system promote progress? D. What goods and services will be produced?
A nation that devotes more of its resources to capital investment is likely to:
A. decrease the slope of its production possibilities curve. B. shift inward its production possibilities curve. C. increase the slope of its production possibilities curve. D. shift outward its production possibilities curve.