Refer to Figure 26.4 for a monopolistically competitive firm. In the long run this firm is most likely to face
A. A demand curve between Demand1 and Demand 2.
B. Demand2 and MR2.
C. Demand1 and MR2.
D. Demand1 and MR1.
Answer: B
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If both supply and demand decrease by the same amount, the equilibrium price
A) does not change. B) rises. C) falls. D) cannot be predicted. E) None of the answers is correct because the price depends on what happens to the equilibrium quantity.
When aggregate expenditure is more than GDP, which of the following is true?
A) Firms spent less on capital goods than they planned. B) Households bought fewer new homes than they planned. C) There was an unplanned decrease in inventories. D) All of the above must be true when aggregate expenditure is more than GDP.
On the eve of the American Revolution, the majority of colonists were naturally born in the colonies rather than immigrants from elsewhere
Indicate whether the statement is true or false
The marginal revenue curve for a monopolist is
A. always above the demand curve. B. generally below the average cost curve. C. always above the average revenue curve. D. always below the demand curve.