What are the characteristics of monopolistic competition?
What will be an ideal response?
Monopolistic competition is characterized by a large number of sellers selling a differentiated product. There are relatively weak barriers to entry and firms compete aggressively on a nonprice basis.
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Use the figure below to answer the following question.
At equilibrium, economic surplus is
A. 200. B. 350. C. 150. D. 700.
Residents of cities with a reputation for good weather, ceteris paribus,
A) pay a higher price for housing because the demand for housing is higher. B) pay a higher price for housing because the supply of housing is higher. C) pay a higher price for housing because the supply and demand for housing is higher. D) pay the same for housing as they would in cities with a reputation for bad weather.
The long-run total cost of zero output is equal to
A. the marginal revenue product of labor. B. fixed cost. C. variable cost. D. zero.
At the most profitable level of production, a firm's marginal cost will be _____ the market price.
(A) Set by (B) Less than (C) Equal to (D) Greater than