In long-run equilibrium, a perfectly competitive firm will operate where price is
A. equal to MR, MC, and the minimum ATC.
B. greater than MC and the minimum ATC, but equal to MR.
C. greater than MR but equal to MC and the minimum ATC.
D. greater than MR and MC, but equal to the minimum ATC.
Answer: A
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One advantage of a fixed exchange rate system compared to a floating or managed float exchange rate system is
A) it is easier for central banks to control inflation. B) there is no need for government intervention. C) it allows the exchange rate to reflect demand and supply in the market. D) it eliminates the possibility of depreciation during a recession.
A monopolist can charge a high price if:
a. the quantity demanded of its product is positively related to price. b. the demand for its product is relatively price-elastic. c. the demand curve for its product is negatively sloped. d. the demand for its product is relatively price-inelastic. e. there exist a large number of substitutes for its product.
The Bureau of Labor Statistics' household survey and establishment survey both yield the same results about total employment
a. True b. False Indicate whether the statement is true or false
Consider a price searcher industry with high barriers to entry. In the short run, total revenues of the monopoly exceeds total costs. What will happen in the long run?
A. Nothing, because would-be rival firms are prohibited from entering the industry or find the start-up costs too costly to warrant the entrepreneurial risk to enter the industry. B. Many firms will enter the market and each firm will eventually operate at a loss. C. firm will be making just enough to cover per unit costs. D. Additional firms will enter the market, but the price will remain the same because the existing firms will not allow price to decrease.