In the long run, the monopolistically competitive firm's demand curve will
A) intersect the ATC at its minimum point.
B) intersect the ATC curve somewhere past the minimum point.
C) become tangent to the ATC curve at its minimum point.
D) become tangent to the ATC curve somewhere to the left of its minimum point.
D
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A recessionary gap is defined as
a. an economy that is operating above its full-employment capacity b. an economy that is operating at full-employment capacity c. the amount by which aggregate expenditure exceeds the aggregate expenditure level needed to generate equilibrium national income at full employment without inflation d. the amount by which aggregate expenditure falls short of the level needed to generate equilibrium national income at full employment without inflation e. the path an economy takes out of a depression
The reduction of a tax
a. could increase tax revenue if the tax had been extremely high b. will always reduce tax revenue regardless of the prior size of the tax c. will have no impact on tax revenue d. causes a market to become less efficient
When L.L. Bean decides to increase its prices due to general inflation, they must reprint the millions of catalogs they produce and distribute. The costs associated with doing so in response to inflation are called:
A. shoe-leather costs. B. menu costs. C. printing costs. D. tax distortions.
A bumper crop of apples can lead to sharply lower market prices and a decline in earned farm income primarily because
A. The income elasticity of demand for apples is negative. B. Foreign exports of apples to the United States should increase. C. The demand curve faced by individual apple farmers is price-inelastic. D. The demand for apples is price-inelastic.