If a monopolistically competitive firm is producing where MR = MC and is in long-run equilibrium, then price is equal to ATC.
Answer the following statement true (T) or false (F)
True
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What is the difference between price discrimination and other forms of discrimination?
What will be an ideal response?
If the cross-price demand curve for capital (relative to the wage) is vertical, the short run response by a firm to an increase in the wage is the same as its long run response.
Answer the following statement true (T) or false (F)
If you were a borrower, which of the following unexpected changes in inflation would you prefer once you have taken out a long term fixed rate loan?
a. An increase from 2% inflation to 6% inflation. b. An increase from 7% inflation to 10% inflation. c. A decrease from 14% inflation to 8% inflation. d. A decrease from 6% inflation to 3%.
Suppose supply decreases, but there is no change in demand. As the market reaches its new equilibrium:
A. excess demand will lead the price to fall. B. excess supply will lead the price to rise. C. excess supply will lead the price to fall. D. excess demand will lead the price to rise.