In setting the price of its product, a monopolistic competitor sets the price equal to its marginal cost plus an amount called the
A) markup.
B) profit.
C) rent.
D) menu cost.
A
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Discretionary fiscal policy
A) may not have desired effects on real GDP because it leads to decreases in aggregate demand. B) may not have desired effects on real GDP because of the time lags. C) would have a larger effect on real GDP if the multiplier was smaller. D) may not have desired effects on real GDP because it leads to increases in aggregate demand.
Under the liquidity premium theory, the expectation that future short-term rates will be constant results in a yield curve that
A) is flat. B) slopes upward. C) slopes downward. D) is flat, slopes upward, or slopes downward, depending on the size of the term premium at each maturity.
An example of countercyclical fiscal policy is:
A. raising government spending when the economy is above potential. B. reducing government spending when the economy is below potential. C. raising government spending when the economy is at potential. D. reducing government spending when the economy is above potential.
A firm's accounting profit is also its
A) economic profit. B) income statement. C) net income. D) statement of liabilities.