Because firms produce a differentiated product, each of the firms in a monopolistically competitive market faces a demand curve that is:
A) perfectly elastic.
B) perfectly inelastic.
C) downward sloping.
D) perfectly elastic or perfectly inelastic depending on whether the firm's output is a luxury or a necessity.
C
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Utility is maximized for the consumption of two goods when: a. the price of the first good equals the price of the second good
b. the marginal utility per dollar spent is equal for both goods consumed. c. the quantity consumed of the first good equals the quantity consumed of the second good. d. the total utility of the first good equals the total utility of the second good.
An externality is
a. the costs that parties incur in the process of agreeing and following through on a bargain. b. the uncompensated impact of one person's actions on the well-being of a bystander. c. the proposition that private parties can bargain without cost over the allocation of resources. d. a market equilibrium tax.
A firm's supply curve corresponds to
A) the marginal cost curve. B) the average total cost curve. C) the marginal cost curve above the minimum average variable cost curve. D) the average variable cost curve.
Use the above figure. The economic profit for this firm is
A. the distance between T and E. B. the distance between E and x-axis. C. zero. D. the distance between T and x-axis.