Compared with a perfectly competitive firm facing the same costs, long-run equilibrium for a monopolistically competitive firm will result in
A) a higher price and greater output.
B) a lower price and less output.
C) a higher price and less output.
D) a lower price and greater output.
Answer: C
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If a price ceiling on coffee is set below the market-clearing price, then
A) the quantity of coffee demanded will decrease. B) the quantity of coffee supplied will increase. C) the quantity demanded for coffee will increase. D) all of the above will occur. E) none of the above will occur.
Refer to Table 13-2. What is the output (Q) that maximizes profit and what is the price (P) charged?
A) P = $55; Q = 5 cases B) P = $50; Q = 6 cases C) P = $45; Q = 7 cases D) P = $40; Q = 8 cases
Everything else held constant, when actual output exceeds the natural rate of output ________ aggregate supply ________
A) short-run; decreases B) short-run; increases C) long-run; increases D) long-run; decreases
Distinguish between cost-of-service regulation and rate-of return regulation. What problem is inherent in both types of regulation?
What will be an ideal response?