Monopolistically competitive firms do not achieve productive efficiency because
a. entry of firms raises production costs in the long run
b. barriers to entry allow profit to be earned in the long run
c. price is greater than marginal cost at the profit maximizing output level
d. profit is maximized at a quantity where average total cost is not minimized
e. there is no threat of entry in the long run
D
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Which of the following refers to diminishing marginal returns?
A) The revenue of a cell phone manufacturer decreased when it increased its product price. B) The additional output produced in a firm decreased as more workers were hired. C) The profits of an entrepreneur increased substantially after he fired a few of his employees. D) The total output of a firm decreased as more workers were hired.
If the U.S. price level increases relative to price levels in foreign countries, _____
a. the aggregate supply curve for the U.S. will shift outward and the aggregate demand curve would remain unchanged b. the aggregate supply curve for the U.S. will shift inward and the aggregate demand curve would remain unchanged c. the aggregate demand curve for the U.S. will shift outward and the aggregate supply curve would remain unchanged d. the aggregate demand curve for the U.S. will shift inward and the aggregate supply curve would remain unchanged e. both the aggregate demand and the aggregate supply curves for the U.S. will shift outward
Is a benevolent command economy likely to achieve greater efficiency than a purely competitive market system? Explain.
What will be an ideal response?
"It is possible to restrict imports and still maintain a fixed level of exports." Do you agree or disagree? Why?
What will be an ideal response?