Product differentiation in monopolistically competitive markets ensures that ____ in equilibrium
a. marginal cost will exceed average revenue
b. price will exceed marginal cost
c. average variable cost will be declining
d. marginal revenue will equal average total cost
b
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People who can earn higher market wages
a. have a greater net utility associated with nonmarket work b. supply more hours to market work than people with lower wages c. are less likely to perform nonmarket work d. are more likely to view leisure as an inferior good e. experience less disutility associated with market work
When the Fed considers the rate of inflation to be undesirably high, it would most likely
a. encourage banks to provide loans by lowering the discount rate b. encourage banks to provide loans by raising the discount rate c. restrict bank lending by lowering the discount rate d. restrict bank lending by raising the discount rate e. restrict bank lending by lowering the federal funds rate
The Mear Corporation finds that its total spending on machine parts increases after the price of machine parts falls, other things being equal. Which of the following is true about the Mear Corporation's demand for machine parts with the price change?
A. It is perfectly inelastic. B. It is price inelastic. C. It is unit elastic. D. It is price elastic.
In which of the following instances is the effect on equilibrium price (whether it rises, falls, or remains unchanged) dependent on the magnitude of the shifts in supply and demand?
What will be an ideal response?