Both monopolistically competitive firms and perfectly competitive firms maximize profits
A) by producing where price equals average total cost.
B) by producing where price equals average variable cost.
C) by producing where marginal revenue equals marginal cost.
D) by producing where marginal revenue equals average revenue.
C
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Which area in the above figure shows the consumer surplus at the price and quantity that would be set by a single-price monopoly?
A) A + B B) A + B + C + D + E C) C + D D) C + D + E + F + G + H
Which of the following is a belief of the monetarists?
A. They think the Great Depression was made worse by poor conduct of monetary policy. B. They believe monetary policy is transmitted to the economy only through its effect on interest rates and planned investment. C. They believe that the interest-investment curve is horizontal. D. They believe the crowding-out effect is insignificant.
Which of the following statements is NOT true about the short run and the long run?
A. In the short run, the firm can change the amount of variable inputs. B. The short run for a firm is today while the long run is next week. C. These terms apply to the planning decisions of firms. D. The firm is always operating in the short run.
Firm A has been dealing in baby food products for the past 10 years and enjoys a good market share. Suppose a new firm enters the market to capitalize on the increasing demand for such products. However, the products of the new firm fail to attract customers. The failure of the new firm is due to
A. the learning curve effect. B. scale economies. C. the pioneering brand advantage of the incumbent. D. the specific assets owned by the incumbent.