If ATC > P, then a profit-maximizing, monopolistically competitive firms earns ________ economic profits.
A. negative
B. positive
C. zero
D. either positive or negative
Answer: A
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In the short run, a perfectly competitive firm earning negative economic profit
A) is on the downward-sloping portion of its AVC. B) is at the minimum of its AVC. C) is on the upward-sloping portion of its AVC. D) is not operating on its AVC. E) can be at any point on its AVC.
The law of demand implies that the demand curve
A) has a negative slope. B) has a positive slope. C) shifts to the right when the price of a good increases. D) shifts to the left when the price of a good decreases.
What concept does economics primarily deal with?
a) scarcity b) poverty c) change d) power
Suppose Bill receives a consumer surplus of $3 on his purchase of a pizza, for which he paid $9. The price Bill was willing and able to pay is
a. $15 b. $12 c. $9 d. $6