Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the short run would be:
A. P1 and Y2.
B. P3 and Y1.
C. P2 and Y2.
D. P2 and Y3.
Answer: D
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A monopolistically competitive firm that earns an accounting profit in the short run
A) could earn an economic profit or break even, but could not suffer an economic loss in the short run. B) does not earn enough to earn an economic profit in the short run. C) could earn an economic profit, break even, or suffer an economic loss in the short run. D) must also earn an economic profit in the short run.
A cartel is:
A. a duopoly with more than two firms. B. a firm that always has a dominant strategy. C. a number of firms who collude to make collective production decisions about quantities or prices. D. the "leader" of an industry, typically the firm with the largest market share.
Which of the following will occur once decision makers fully adjust to an increase in prices?
What will be an ideal response?
Table 24.1Monopoly Costs and RevenueQuantityPriceTotal Cost1$500$4002$450$6503$400$9504$350$1,3005$300$1,700In Table 24.1, according to the profit maximization rule, at the profit-maximizing level of output, the average total cost is
A. $316.67. B. $340. C. $325. D. $400.