Suppose you operate in a monopolistically competitive market. If you sell your good at a price of $20 and your average cost of production is $15:
A. your market may be in long-run equilibrium.
B. you cannot be in short-run equilibrium.
C. you should expect competing firms to enter your market and shift the demand curve for your good to the left.
D. you should expect competing firms to enter your market and shift the demand curve for your good to the right.
Answer: C
You might also like to view...
Rent seeking through lobbying
A) reduces deadweight loss. B) uses up resources that result in additional costs to society. C) results in perfect price discrimination. D) results in perfectly competitive industries.
Along the per worker production function, as the capital-labor ratio ________, increases in output per worker become progressively ________
A) increases; larger B) increases; smaller C) decreases; larger D) decreases; smaller
Entry causes the competitive firm's demand curve to fall
Indicate whether the statement is true or false
Coins held in commercial banks are:
A. included in M1 but not in M2. B. included both in M1 and in M2. C. included in M2 but not in M1. D. not part of the nation's money supply.