Compared with a firm in a perfectly competitive market, the demand curve faced by a monopolistically competitive firm is
A) more elastic.
B) more inelastic.
C) perfectly elastic.
D) perfectly inelastic.
B
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
Assume a competitive market is in equilibrium. There is an increase in demand, but no change in supply. As a result, the equilibrium price ________, and the equilibrium quantity ________
A) rises; increases B) falls; increases C) falls; decreases D) falls; does not change E) rises; does not change
For a perfectly competitive firm, profit is maximized at the output level where i. total revenue exceeds total cost by the largest amount. ii. marginal revenue equals marginal cost. iii. price equals marginal cost
A) i only B) ii only C) ii and iii D) i and ii E) i, ii, and iii
Discretionary economic policy is not beneficial in the ________
A) traditional Keynesian theory B) new Keynesian theory C) Luka Brazzi model D) real business cycle theory