In the long run in a monopolistic competitive industry,
a. economic profits will be positive.
b. price will be driven to zero.
c. the firm will not operate where MR = MC.
d. economic profit will be zero.
e. price will exceed average cost.
d
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Refer to Figure 9.2. A movement from point b to point d could be caused by a(n)
A) decrease in government spending. B) increase in the price of oil. C) decrease in taxes. D) increase in short-run aggregate supply.
In short-run perfectly competitive equilibrium, which of the following is alwaystrue?
a. Profit equals zero. b. Profit can be negative, zero, or positive. c. Profit can be zero or positive, but not negative. d. Profit is positive, otherwise firms would not produce.
If a boxing fight is shown on pay-per-view television every Saturday at 4pm, the demand curve for each fight is given below.
If viewing a fight were free to anyone who tuned in, total economic surplus would be ________.
A. $25 million B. $225 million C. $625 million D. $50 million
In the long run, the price for a perfectly competitive firm
A. will allow for positive economic profits. B. will equal marginal cost where marginal cost is at a minimum. C. will be determined by the firm's supply and demand curves. D. will equal the minimum average total cost.