In the long run, a monopolistically competitive firm and a perfectly competitive firm both produce at minimum average cost.
Answer the following statement true (T) or false (F)
False
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Transfer payments are excluded from GDP
Indicate whether the statement is true or false
Bank reserves will decrease if
A) Fed liabilities decrease. B) currency held by the public decreases. C) float decreases. D) Fed assets increase.
If the price elasticity of demand for a good is 4, then a 12 percent decrease in price results in a
a. 0.33 percent increase in the quantity demanded. b. 3 percent increase in the quantity demanded. c. 30 percent increase in the quantity demanded. d. 48 percent increase in the quantity demanded.
Exhibit 9-2 A monopolistic competitive firm
?
Comparing the firms in a monopolistic competitive industry shown in Exhibit 9-2 to a perfectly competitive firm in long-run equilibrium, we find that both firms
A. choose a price equal to the marginal cost at the profit-maximizing quantity. B. will experience entry of new firms into the industry. C. earn zero economic profits. D. minimize cost per unit at their profit-maximizing quantity.