Under the conditions of monopolistic competition:
A. firm profits are higher in the long run than in the short run.
B. average costs of production are the same in the short run as they are in the long run.
C. economic profit is zero in the long run.
D. price equals marginal cost.
Answer: C
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Taco Bell's economists determine that the price elasticity of demand for their tacos is 2.0. So, if Taco Bell raises the price of its tacos by 6.0 percent, the quantity demanded will decrease by ________ percent
A) 2.0 B) 3.0 C) 6.0 D) 12.0
Refer to Table 4-8. If a minimum wage of $10.00 an hour is mandated, what is the quantity of labor supplied?
A) 390,000 B) 370,000 C) 350,000 D) 40,000
The United States and many other countries often impose trade sanctions on other countries. These sanctions
A) decrease producer and consumer surplus in both the sanctioned and sanctioning countries. B) tend to increase total welfare. C) tend to decrease the deadweight loss. D) tend to decrease consumer and producer surplus only in the sanctioned country.
If the government legalizes the purchase and sale of marijuana, the equilibrium quantity would then _________ and the price would then ________ if the supply of marijuana increased by _______ than the demand for marijuana increased
A) fall; fall; more B) fall; rise; more C) rise; fall; more D) rise; fall; less E) fall; fall; less