Consider a monopolistically competitive firm in a market in long-run equilibrium. This firm is likely earning
a. a positive economic profit since it is charging a price above marginal cost.
b. no economic profit since it is charging a price equal to its marginal cost.
c. a positive economic profit since it is charging a price above its average total cost.
d. no economic profit since it is charging a price equal to it average total cost.
d
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Net exports is negative if
A) the value of exports exceeds the value of imports. B) the value of imports exceeds the value of exports. C) the tariff payments are included in the value of imported and exported items. D) too much production occurs in the exporting country during the year.
One way a government can eliminate a market failure
A) is to regulate the price so that it equals marginal cost. B) is to implement a price floor equal to marginal cost. C) is to regulate the price so that it is below average cost. D) None of the above solutions will eliminate a market failure.
Which of the following pairs is most likely to represent complementary goods?
a. Hotels and campgrounds. b. Butter and margarine. c. Bacon and eggs. d. Miniature golf and bowling. e. Coffee and tea.
The justification for the patent system is that it
a. protects desirable monopolies b. encourages innovation c. discourages the development of substitute goods d. guarantees high profit for the monopolies so that they can use the profit as a source for research and development e. discourages competition