Answer the following questions true (T) or false (F)
1. In the long-run equilibrium, both the perfectly competitive firm and the monopolistically competitive firm produce the output at which MR=MC and charge a price equal to the average total cost of production.
2. Most economists believe that consumers would be better off if markets were perfectly competitive rather than monopolistically competitive.
3. An oligopolistic industry is characterized by a few large firms acting independently.
1. TRUE
2. FALSE
3. FALSE
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Suppose two countries use different combinations of inputs, such as labor and capital, to produce the same product. This implies all of the following except that
A) one country is more efficient in the production of the good than the other. B) the inputs are not equally productive in the two countries. C) the prices of the inputs are not the same in the countries. D) the two countries use different technologies to produce the product.
Advocates of floating rates pointed out that
A) removal of the obligation to peg currency values would restore monetary control to central banks. B) imposing of the obligation to peg currency values would restore monetary control to central banks. C) removing of the obligation to peg currency values would restore fiscal control. D) imposing of the obligation to peg currency values would restore fiscal control. E) imposing of the obligation to peg currency would restore monetary control to the consumer.
In the long run, the supply curve
A) is more elastic than it is in the short run. B) is less elastic than it is in the short run. C) exhibits no systematic sequence of changes in elasticity. D) exhibits no change in elasticity at all.
A resource that earns only economic rent
a. cannot be employed in any other line of production, so its opportunity cost is zero b. is rental payment for a resource that has already been paid for c. is impossible because all resources have an opportunity cost associated with their use d. is not fixed in quantity e. has a perfectly elastic supply curve