In the long-run equilibrium for a monopolistically competitive firm, price:
A. exceeds marginal cost.
B. is equal to marginal revenue.
C. is equal to marginal cost.
D. exceeds average total cost.
Answer: A
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Everything else remaining unchanged, if a new seller enters a market to compete with an existing monopoly that is enjoying economies of scale, it will lead to:
A) higher profits for both firms. B) higher profits for the existing firm. C) lower profits for the existing firm. D) higher market power for the existing firm.
When positive or negative externalities exists in the production of a good, the market outcome is an inefficient outcome.
Answer the following statement true (T) or false (F)
Sovereign debt crises:
a. always occur when debt/GDP ratios reach a specific point. b. mean that the optimal budget deficit is zero. c. can lead to foreign capital flight. d. can lead to exchange rate depreciation. e. both c and d.
Factors that cause the short-run supply curve to change are factors that affect
A) demand. B) fixed costs. C) variable costs. D) the market but not the individual firm.