Which of the following is a distinction between perfectly competitive and monopolistic competition?
A. Perfectly competitive firms must compete with rival sellers; monopolistically competitive firms do not confront rival sellers.
B. Monopolistically competitive firms can raise their price without losing sales; perfectly competitive firms must lower their price in order to sell more of their product.
C. Perfectly competitive firms confront a perfectly elastic demand curve; monopolistically competitive firms face a downward-sloping demand curve.
D. Perfectly competitive firms may make either economic profits or losses in the short run, but monopolistically competitive firms always earn an economic profit.
Answer: C
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A monopolist is maximizing profit at an output rate of 1,000 units per month. At this output rate, the price that its customers are willing and able to pay is $8 per unit, average total cost is $5 per unit, and marginal cost is $6 per unit
It may be concluded that at this monthly output rate, marginal revenue is A) $5 per unit, and the monopolist earns zero economic profits. B) $6 per unit, and the monopolist earns economic profits of $2,000 per month. C) $6 per unit, and the monopolist earns economic losses of $1,000 per month. D) $6 per unit, and the monopolist earns economic profits of $3,000 per month.
If the cross-price elasticity of demand for two goods is negative, then the two goods are substitutes
a. True b. False Indicate whether the statement is true or false
Cyclical unemployment refers to the year-to-year fluctuations in unemployment around its natural rate
a. True b. False Indicate whether the statement is true or false
Briefly explain how the tax system can stabilize the economy.
What will be an ideal response?