How does the short-run equilibrium of a monopolistic competitor differ from a monopolist? How does it differ from a perfect competitor?
What will be an ideal response?
The short-run equilibrium of a monopolistic competitor looks just like that for a monopolist, with the exception that the demand curve facing the monopolist will be less elastic than the demand curve facing the monopolistic competitor. The equilibrium differs from a perfect competitor in that the demand curve slopes down, so price is greater than marginal cost.
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Given the data in Scenario 14.3, how much labor should the firm employ if labor costs $30 a unit?
A) 3 units of labor B) 4 units of labor C) 5 units of labor D) 6 units of labor E) 7 units of labor
The principal reason that monetary policy has lags is that it takes a long time for
a. changes in the interest rate to change aggregate demand. b. changes in the money supply to change interest rates. c. the Fed to make changes in policy. d. Congress and the President to approve Fed policy.
Who is most likely to be earning economic rent?
A. A landlord B. A postal employee C. Someone who lives in a rental apartment D. A major league baseball player
Compared with a monopolist, the demand curve faced by a monopolistically competitive firm is
A) more elastic. B) more inelastic. C) perfectly elastic. D) perfectly inelastic.