In the short run, the price charged by a 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. must be equal to ATC.
Answer: C
You might also like to view...
According to the theory of purchasing power parity, the exchange rate between two countries reflects
A) the interest rates in the two countries. B) the unemployment rates in the two countries. C) government spending in the two countries. D) differences in the overall price levels in the two countries.
Return to the ready-to-eat cereal example from the previous question. Now assume that there is only one kind of cereal, so the manufacturer cannot distinguish between types of consumer (adults vs. children, of which suppose there are equal numbers in the market). What is the optimal menu of cereal boxes?
a. a 3 ounce box (which adults will buy) sold for 48 cents; a 4 ounce box (which children will buy) sold for $1.12. b. a 3 ounce box (which adults will buy) sold for 48 cents; a 4 ounce box (which children will buy) sold for 64 cents. c. a 2 ounce box (which adults will buy) sold for 36 cents; a 4 ounce box (which children will buy) sold for 76 cents. d. No menu; the manufacturer is better off just selling a 5 ounce box for $1.12, which is only purchased by children.
Suppose the market-equilibrium quantity of good x is larger than the socially-optimal quantity of good x. Does the production of good x convey a positive externality or does it convey a negative externality?
Refer to the information provided in Table 22.1 below to answer the question(s) that follow. Table 22.1
Refer to Table 22.1. The labor-force participation rate is
A. 66.7%. B. 75.0%. C. 77.8%. D. 80.9%.