Use the above figure. When it maximizes its economic profits, the monopolistically competitive firm depicted in the figure
A) is earning an economic profit.
B) is earning an accounting profit.
C) is earning an economic loss.
D) must increase output to reduce the ATC.
C
You might also like to view...
Suppose an economy has a balanced federal budget, and a favorable supply shock hits the economy. Tax revenues will ________ and expenditures on transfer payments will ________, resulting in a budget ________
A) fall; fall; deficit B) increase; fall; surplus C) fall; increase; deficit D) increase; increase; surplus
The figure above shows the market for a good with an external benefit. When 6 units are produced, marginal social benefit equals ________ and marginal external benefit equals ________
A) $200; $150 B) $350; $200 C) $200; $50 D) $350; $150 E) $150; $250
The term "open market operations" refers to the:
a. loan-making activities of commercial banks. b. effect of expansionary monetary policy on interest rates. c. operation of competitive markets in the banking industry as the result of deregulation. d. buying and selling of government securities by the Federal Reserve.
A welfare loss occurs when a monopolist chooses not to produce units of output that are of greater marginal value to consumers than the marginal cost of producing them
a. True b. False Indicate whether the statement is true or false