Which of the following will not happen as a consequence of a monopolistically competitive firm suffering economic losses in the short run?
A) The firm will exit the industry if it continues to suffer economic losses.
B) In the long run the firm will be able to charge a price that is greater than its average total cost.
C) The firm's demand curve will shift to the right if it stays in business in the long run.
D) The firm will break even if its stays in business in the long run.
B
You might also like to view...
Sellers in a perfectly competitive market:
A) are price takers. B) sell differentiated goods and services. C) are not allowed to exit the market. D) are small in number.
In monopolistically competitive markets in long run equilibrium: a. more than the efficient level of output will be produced because price exceeds marginal cost
b. less than the efficient level of output will be produced because price exceeds marginal cost. c. more than the efficient level of output will be produced because marginal revenue exceeds marginal cost. d. less than the efficient level of output will be produced because marginal revenue exceeds marginal cost.
Suppose the government auctions off permits to car and truck owners, with each permit allowing the user to emit five tons of carbon dioxide each year from his or her vehicle. The total amount of carbon dioxide permitted is less than the amount currently emitted by vehicles. These permits could then be bought and sold on a market. Which of the following is the best term for this type of system?
A. A cap-and-trade system B. A command-and-control system C. A mitigation allowance D. A price-based adaptation system
