If firms in a monopolistically competitive industry are making an economic profit,
A. price is higher than marginal cost.
B. new firms will enter the industry.
C. economic profit will fall in future periods.
D. all of the above
E. none of the above
Answer: D
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Optimal currency areas should have ________ in order to succeed
A) high labor mobility B) low labor mobility C) imperfectly mobile capital D) few policy externalities
C = $40 million + 0.6(1 - 0.2)Y I = $35 million G = $31 million NX = -$6 million Based on the above data, the equilibrium level of GDP is
A) $113.6 million. B) $192.3 million. C) $208.3 million. D) $833.3 million.
Suppose a monopolist and a perfectly competitive firm have the same cost curves. The monopolistic firm would:
a. charge a lower price than the perfectly competitive firm. b. charge a higher price than the perfectly competitive firm. c. charge the same price as the perfectly competitive firm. d. refuse to operate in the short run unless an economic profit could be made. e. refuse to operate in the short run if an economic loss was present.
Why do long lags make discretionary policy less effective?
What will be an ideal response?