In monopolistic competition, the point of tangency between the demand curve and the ATC curve cannot be at the lowest level of average cost. What does this mean for firms?
a. The fail to operate at the highest cost of production even with long-run adjustments.
b. They operate at the lowest cost of production because of long-run adjustments.
c. They fail to operate in the most efficient manner even with long-run adjustments.
d. They operate in the most efficient manner because of long-run adjustments.
c. They fail to operate in the most efficient manner even with long-run adjustments.
You might also like to view...
Checking account balances are included in
A) M1 only. B) M2 only. C) both M1 and M2. D) neither M1 nor M2.
What is the difference between a normal good and an inferior good? How does this relate to the demand curve?
What will be an ideal response?
Consider a two-person, two-strategy game in which only pure strategies are played. Such a game must have at least one
a. Nash equilibrium. b. player with a dominant strategy. c. Pareto-optimal outcome. d. outcome that is both a Nash equilibrium and Pareto optimal.
In the current year, the CPI is 122 and during the previous year the CPI was 115. The inflation rate between these years is
A) -5.7 percent. B) -6.1 percent. C) 6.1 percent. D) 5.7 percent. E) 1.61 percent.