In the short run, in equilibrium, firms that operate in a monopolistically competitive market face a down sloping demand curve and will charge a price where _____ and ______.
a. quantity produced is maximized; costs are minimized
b. sales revenue is maximized; costs are falling
c. MR = MC; P > average cost
d. average costs are rising; sales are rising
Ans: c. MR = MC; P > average cost
You might also like to view...
Refer to Figure 13-2. Ceteris paribus, a decrease in the expected price of an important natural resource would be represented by a movement from
A) SRAS1 to SRAS2. B) SRAS2 to SRAS1. C) point A to point B. D) point B to point A.
The mangers of Happy Campers and Camp with Us are engaged in a strategic interaction in which their interests are aligned, but there is more than one possible equilibrium. All of the following can help the managers determine the equilibrium outcome except which one?
A) an announcement made by either firm regarding their future plans B) the Pareto criterion C) a focal point D) unpredictable strategies
A market system works very well in solving some basic problems of the economy but it fails in some cases. Provide examples
International reserves are:
A. dollars held by the Federal Reserve to support the value of the dollar. B. reserves held by banks to back international deposits. C. foreign currency deposits held by banks to provide international liquidity for domestic customers. D. foreign currency assets held by a government for the purpose of purchasing domestic currency in the foreign exchange market.