What gives the monopolistically competitive firm some degree of monopoly power?
a. differentiated products
b. identical products
c. high long-run economic profits
d. zero long-run economic profits
a. differentiated products
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
The manager of Greene Enterprises, Inc., recently estimated its average variable cost (AVC) function to beAVC = 88 - 0.026Q + 0.000003Q2Greene Enterprises faces total fixed costs (TFC) of $300,000. When Greene's output is 6,000 units, average variable cost (AVC) is
A. rising B. falling C. greater than short-run marginal cost D. less than short-run marginal cost E. both a and d
In a constant-cost industry, inputs prices do not change with changes in output.
Answer the following statement true (T) or false (F)
For the federal deficit to be lowered
A) the federal government must increase its spending and increase net exports. B) the federal government's expenditures must be lower than its tax revenue. C) the Federal Reserve must raise interest rates and lower the required reserve ratio. D) the Federal Reserve must reduce the money supply.