Which of the following is not a characteristic of long-run equilibrium in a monopolistically competitive market?
A) Selling price equals average total cost.
B) Production is at minimum average total cost.
C) Marginal revenue equals marginal cost.
D) Selling price is greater than marginal cost.
Answer: B
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Refer to Table 4-3. The table above lists the marginal cost of cowboy hats by The Waco Kid, a firm that specializes in producing western wear. If the market price of cowboy hats is $35, The Waco Kid will produce
A) 1 hat. B) 2 hats. C) 3 hats. D) 4 hats.
Refer to Figure 21-1. Which of the following is consistent with the graph depicted above?
A) Households become spendthrifts and begin to save less. B) An expected recession decreases the profitability of new investment. C) The government runs a budget surplus. D) Technological change increases the profitability of new investment. Figure 21-2
The Japanese real interest rate declines relative to the German real interest rate. German net exports ________ and the German exchange rate ________
A) increase; rises B) increase; falls C) decrease; rises D) decrease; falls
Because of the lag of the effects of changes in monetary policy and the failure of forecasters to anticipate supply-side shocks as well as changes in money demand or velocity, activist policy changes have tended at times during the mid-1970s to
A) accelerate inflation during expansions. B) increase unemployment during recessions. C) accelerate inflation and increased unemployment. D) dampen inflation and decrease unemployment.