Consider monopoly, monopolistic competition, and perfect competition. In which of these three market structures does a profit-maximizing firm charge a price that exceeds marginal cost?
a. monopoly only
b. monopoly and monopolistic competition only
c. monopoly, monopolistic competition, and perfect competition
d. The answer cannot be determined without knowing whether the market is in the long run or short run.
b
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Europe may not be an optimum currency area because
A) people speak different languages. B) workers are not very mobile. C) the countries do not trade very much with each other. D) financial markets are weak.
Credit markets are
A) bad, as they cause people to accumulate debt. B) not important for the financial crisis. C) important, but given too little attention in the past by macroeconomists. D) markets that work perfectly.
Rational ignorance suggests that voters may not spend much time examining candidates before an election because
a. politics is boring b. each voter has virtually no chance of deciding the election c. public choices are not important to society d. candidates are chosen by the electoral college e. candidates are usually so different that it is easy to determine which is better
If you believe that government can effectively manage aggregate demand to achieve full employment without inflation, you are a member in good standing in the
a. classical school b. Keynesian school c. neo-Keynesian school d. rational expectations school e. supply-side school