A monopolistically competitive firm
a. charges a price that is equal to marginal cost.
b. experiences a zero profit in the long run.
c. produces at the efficient scale in the long run.
d. All of the above are correct.
b
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Historical note concerning U.S. price levels: During the 1970s, with the onslaught of OPEC oil price increases
a. inflation occurred and it was primarily cost-push b. inflation was approximately zero because the Vietnam war ended and the demand for military goods fell dramatically c. deflation was persistent d. inflation occurred and it was primarily demand-pull e. stagflation, the difference between inflation and deflation, was approximately zero
An increase in the parameter c, the proportion of money individuals wish to hold as currency, will tend to cause which of the following?
A) an increase in the monetary base (H) B) a reduction in H C) an increase in the money multiplier D) a reduction in the money multiplier
Trade flows measure the:
A. movement of resources between nations. B. exports and imports of goods and services. C. transfer of information from one nation to another. D. transfer of money between nations.
If the Fed carries out an open market operation and buys U.S. government securities, the federal funds rate ________ and the quantity of reserves ________
A) rises; increases B) falls; increases C) rises; decreases D) falls; decreases E) rises; does not change