Which of the following is not a key feature of monopolistic competition?
a. Excess capacity
b. A markup of price over marginal cost
c. Positive economic profits for firms in the long run
d. Differentiated products among firms in the market
c
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An increase in interest rates will cause investment to
A) increase. B) decrease. C) not change. D) move erratically, depending on the interest rate effect on saving.
Suppose a publisher faces the following costs of producing 10,000 newspapers each month: $5,500 cost of labor; $2,200 monthly mortgage payment; $250 cost of electricity to run the printing presses; $800 for ink and paper; and $200 in city property taxes (based on the value of the building and land). Its total variable costs are:
a. $8,950. b. $8,750. c. $6,550. d. $6,300. e. $5,500.
A tax on golf clubs will cause buyers of golf clubs to pay a higher price, sellers of golf clubs to receive a lower price, and fewer golf clubs to be sold
a. True b. False Indicate whether the statement is true or false
In the long run, assuming that the owner of a firm in a competitive industry has positive opportunity costs, she
a. should exit the industry unless her economic profits are positive. b. will earn zero accounting profits but positive economic profits. c. will earn zero economic profits but positive accounting profits. d. should ignore opportunity costs because they are a type of sunk cost that disappears in the long run.