In monopolistic competition, a firm has some ability to affect the price for its product because of
A) easy entry and exit.
B) economic profits.
C) product differentiation.
D) many competitors.
C
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What is the opportunity cost of going from point C to point D?
In the above figure, when the price of pretzels is $3.00 per pound, the total producer surplus from all the pretzels will be
A) zero. B) greater than at any other price. C) less than at any other price. D) the sum of the difference between $3.00 and the marginal cost of all the pounds produced.
If the market price is $40 in a perfectly competitive market, the marginal revenue from selling the fifth unit is
A) $8. B) $20. C) $40. D) $200.
An automatic stabilizer is a feature of the economy that
A. makes prices “sticky.” B. reduces its sensitivity to shocks. C. maximizes its volatility. D. automatically reduces recessionary trends.