Answer the following statement(s) true (T) or false (F)
1. Step 2 of the three-step method for monopolistic competition involves finding total cost.
2. If total revenue is greater than total costs at q*, the firm is generating total economic profits.
3. When there are economic losses, firms often enter the market.
4. If many firms producing similar products enter the market, the demand curve for existing firms producing this type of product will become less elastic.
5. If many sellers producing similar products leave the market, the demand curve for existing firms producing this type of product will shift to the right.
1. FALSE
2. TRUE
3. FALSE
4. FALSE
5. TRUE
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The price of a gallon of gasoline in Bonland is $3.20. However, just before the election, the government decides to fix the price of gasoline at $2.80 per gallon. This is an example of a ________
A) positive externality B) negative externality C) price floor D) price ceiling
If bond investors think they lack enough details to evaluate the likelihood of defaults on certain bonds, this will result in higher:
A) expected return B) liquidity C) information costs D) expected inflation
Which of the following is not an implicit cost?
A) wages B) opportunity cost of using an owner's savings C) owner-provided capital D) owner-provided labor
A frim wishing to acquire a monopoly position would be willing to spend an amount up to its anticipated monopoly profit in rent-seeking activities
a. True b. False