In the long run, a representative firm in a monopolistically competitive industry will typically:
A. earn a normal profit, but not an economic profit.
B. produce a level of output at which marginal cost and price are equal.
C. have an elasticity of demand that will be less than it was in the short run.
D. have a larger number of competitors than it will in the short run.
Answer: A
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What is the formula for the average product of labor?
A. ?q/?L B. L/q C. ?L/?q D. q/L
If after a change in an allocation it can be demonstrated that the value of the gains exceeds the value of the losses, then the change is said to be potentially efficient.
Answer the following statement true (T) or false (F)
Refer to the game theory matrix where the numerical data show the profits resulting from alternative combinations of advertising strategies for Ajax and Acme. Ajax's profits are shown in the upper right part of each cell; Acme's profits are shown in the lower left. Without collusion, the outcome of the game:
A. maximizes joint profits for the firms.
B. results in a prisoner's dilemma.
C. results in greater economic efficiency.
D. forces one or more firms out of the industry.
Suppose Acme and Mega produce and sell identical products and face zero marginal and average cost. Below is the market demand curve for their product. 
If Acme and Mega decide to collude and work together as a monopolist with each firm producing half the quantity demanded by the market at the monopoly price, then what will be Mega's economic profit?
A. $150 B. $50 C. $100 D. $0