Which of the following characterize a firm in monopolistic competition in the long run?
i. operating at the minimum efficient scale
ii. markups of price over marginal cost
iii. zero economic profit
A) i and ii
B) i and iii
C) ii and iii
D) i, ii, and iii
E) only ii
C
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A video rental store rents old movies for $1.50 per day. On average, 300 movies are rented each day. The store receives several copies of a new smash movie just released in video and decides to rent these movies at $3.50 per day
Now, 400 movies are rented each day. Thus, though the average rental price of a movie increased, the quantity rented increased. Does this mean that the law of demand does not hold for this market?
During a mild winter, the price of home heating oil is expected to be less than it would be during a normal winter
What will be an ideal response?
In the market for labor, the monopsonist is the sole:
A. seller and can push wages down, below the competitive wage. B. buyer and can keep wages up, above the competitive wage. C. buyer and can push wages down, below the competitive wage. D. seller and can keep wages up, above the competitive wage.
The Laffer curve demonstrates that raising tax rates:
A. increases then decreases tax revenues. B. always increases tax revenues. C. always decreases tax revenues. D. decreases then increases tax revenues.