Where does a monopolistic competitive firm determine its quantity?
a. Price equals marginal revenue
b. Price equals marginal cost
c. Marginal revenue equals marginal cost
d. Marginal revenue equals average total cost
c. Marginal revenue equals marginal cost
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Which of the goals pursued by policymakers in an open economy is desirable because it can reduce the severity of business cycles?
A) exchange-rate stability B) monetary policy independence C) free capital flows D) appreciation of the domestic currency
To reduce adverse selection
A) firms can use screening. B) both consumers and firms can use screening. C) the government could eliminate all monopolies and oligopolies. D) Both B and C.
Keynesian economics focuses on the role of aggregate spending in determining the level of real GDP
a. True b. False Indicate whether the statement is true or false
In the mercantilist system:
A. markets, rather than political forces, make the central economic decisions. B. governments let the market decide what to produce. C. serfs make the central economic decisions. D. governments distributed the rights to produce.