Which of the following statements best describes the price, output, and profit conditions of monopolistic competition?
a. Price will equal marginal cost at the profit-maximizing level of output; profits will be positive in the long-run.
b. Price will always equal average variable cost in the short run and either profits or losses may result in the long run.
c. Marginal revenue will equal marginal cost at the short run, profit-maximizing level of output; in the long run, economic profit will be zero.
d. Marginal revenue will equal average total cost in the short run; long-run economic profits will be zero.
c
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The figure above shows the demand for and supply of rental housing in Smallton. If a rent ceiling is set at $400, how many apartment units are rented?
A) 2,000 B) 3,000 C) 4,000 D) None of the above answers is correct.
Which list has market structures in the correct order from the most to the least market power?
a) Oligopoly, perfect competition, monopolistic competition, monopoly b) Monopoly, oligopoly, monopolistic competition, perfect competition c) Perfect competition, oligopoly, monopolistic competition, monopoly d) Monopoly, monopolistic competition, oligopoly, perfect competition
When quantity supplied equals quantity demanded, there is:
A. disequilibrium. B. excess quantity supplied. C. a market-clearing price (equilibrium price). D. excess quantity demanded.
Two goods are complements if:
A. an increase in the price of one good leads to an increase in demand for the other. B. there are no substitutes for either of them. C. people tend to consume either one or the other. D. an increase in the price of one good leads to a decrease in demand for the other.