A profit-maximizing firm in a monopolistically competitive market is characterized by which of the following?
a. marginal cost exceeds marginal revenue
b. average revenue equals marginal cost
c. price exceeds marginal cost
d. All of the above are correct.
c
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Answer the following statement(s) true (T) or false (F)
1. The sum of all polluters’ MACs equals the marginal social cost (MSC) of abatement. 2. Much of the air pollution in Catano, Puerto Rico was linked to a nearby oil refinery. 3. By definition, the marginal abatement cost (MAC) curve shows the change in costs associated with higher levels of abatement, using the most widely available technology. 4. The marginal cost of enforcement (MCE) must be added vertically to the MACmkt to derive the marginal social cost (MSC) of abatement function. 5. If a standard is set to balance the well-being of society with the associated costs, it is called a benefit-based standard.
The subprime financial crisis caused a recession because of the ________ in adverse selection and moral hazard problems and the ________ in housing prices
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
What affects the price elasticity of demand for a monopolist's product?
What will be an ideal response?
If a production process involved the creation of a negative externality, then the social cost of production would be:
A. larger than the private cost of production. B. the same as the private cost of production. C. smaller than the private cost of production. D. zero.