Long-run equilibrium for firms in monopolistically competitive industries is similar to that for firms in perfect competition in that:
A. price equals marginal cost.
B. marginal revenue equals price.
C. price equals average total cost.
D. price equals minimum possible average total cost.
Answer: C
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When Sam's annual income was only $15,000, he purchased 50 pounds of bananas a year. When his income rose to $18,000, he purchased 55 pounds a year. Therefore
A) for Sam, bananas are an inferior good. B) his income elasticity of demand for bananas is negative. C) his income elasticity and price elasticity of demand for bananas are both greater than one. D) for Sam, bananas are a normal good.
In the long run, an entrepreneur who owns a perfectly competitive firm will earn no income from that firm
a. True b. False
Price leadership may sometimes be an example of covert collusive behavior by oligopolies.
Answer the following statement true (T) or false (F)
Assume that Carlo concludes that he should eat less and play video games more. In this situation, it must be TRUE that the marginal utility of Carlo's last dollar spent on food is
A. less than the marginal utility of the last dollar spent on video games. B. equal to the marginal utility of the last dollar spent on video games. C. more than the marginal utility of the last dollar spent on video games. D. negative and less than the marginal utility of the last dollar spent on video games.