Which of the following is true in long-run equilibrium for both perfect competition and monopolistic competition?
A. Accounting profit is zero.
B. Marginal cost equals price.
C. Long-run average cost is at a minimum.
D. Economic profit is zero.
Answer: D
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Compared to a perfectly competitive firm, in a long run the monopolistically competitive firm will have
A) a lower price. B) a lower average cost. C) a horizontal demand function. D) a lower rate of output.
Some luxury product manufacturers will purposefully raise prices on their goods in order to reduce sales volume. This strategy may successfully increase sales revenue if the luxury goods are subject to the ________ effect and have relatively ________ demand.
A. bandwagon; elastic B. snob; inelastic C. bandwagon; inelastic D. snob; elastic
The ________ multiplier is smaller than the ________ multiplier.
A. government spending; closed economy B. money; government spending C. closed economy; money D. open economy; closed economy
If a job requires a level of strength that the average woman cannot typically achieve, then interviewing and hiring no women would be an example of
A. statistical discrimination. B. disparate treatment discrimination. C. adverse impact discrimination. D. comprehensive discrimination.