In the long run, the price charged by the monopolistically competitive firm attempting to maximize profits:
A. must be less than ATC.
B. must be more than ATC.
C. may be either equal to ATC, less than ATC, or more than ATC.
D. will be equal to ATC.
Answer: D
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Russia, Iran and Qatar made the first serious moves in October 2008 toward forming an OPEC-style cartel on natural gas. What is the goal of a cartel?
A) restrict output B) raise prices C) increase sales D) increase profits
What are the two policy options used to influence the economy?
What will be an ideal response?
At a constant rate of exchange between currencies, higher inflation makes domestic goods sold abroad ________ expensive and hence, ________ short-run equilibrium output.
A. less; decreases B. more; increases C. more; decreases D. less; increases
In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X. Consumer expectations that the price of X will rise sharply in the future will:
A. increase D, decrease P, and increase Q. B. increase D, increase P, and increase Q. C. increase S, increase P, and increase Q. D. decrease S, increase P, and increase Q.