Under the conditions of monopolistic competition, if a firm is earning economic profits in the short run:
A. prices are higher in the long run than in the short run.
B. firm profits are higher in the long run than in the short run.
C. average costs of production are higher in the long run than in the short run.
D. long-run economic profits are positive.
Answer: C
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Which of the following is not an example of a government-imposed entry barrier?
A) occupational licensing B) antitrust legislation C) patents D) barriers to international trade
The scale economies index (SCI) is equal to:
A) the cost-output elasticity. B) one minus the cost-output elasticity. C) 100 times the degree of economies of scope (SC). D) marginal cost divided by average cost.
If you fit a line through a scatter diagram of points that represent coordinates of consumer spending and disposable income, the slope of this line will equal the
a. propensity to consume b. variable propensity to consume. c. marginal propensity to consume. d. average propensity to consume.
Which of the following tools and concepts is useful in the analysis of international trade?
a. total surplus b. domestic supply c. equilibrium price d. All of the above are correct.