Which of the following is true of perfect competition but is not true of monopolistic competition?
a. The firm faces a downward-sloping demand curve.
b. The firm faces a downward-sloping marginal revenue curve.
c. The firm will earn zero economic profit in the long run.
d. The firm will produce at a point where price equals marginal cost.
Ans: d. The firm will produce at a point where price equals marginal cost.
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Suppose Melita is willing to pay a maximum of $30 for a pair of normal sunglasses and $36 for the same pair with a double UV-protection filter. If the unit cost of upgrading a product is $6, the seller will upgrade the product if Melita pays at least $35 for it
Indicate whether the statement is true or false
The prices of most services have risen much faster than inflation in recent years because
a. wages and salaries of service providers have risen much faster than inflation. b. wages and salaries of service providers have risen but their productivity has not. c. the productivity of service providers has risen dramatically. d. the demand for services has risen.
According to the above figure for a gasoline market, at a price of $1 per gallon of gasoline, there would be
A) a shortage of 30 million gallons.
B) a surplus of 30 million gallons.
C) a shortage of 20 million gallons.
D) a surplus of 50 million gallons.
Which of the following statements is true?
A) A long-run competitive equilibrium can only be achieved in constant-cost industries. B) When an industry achieves a long-run competitive equilibrium, industry output will not change in the future. C) A long-run competitive equilibrium outcome is not economically efficient. D) When an industry reaches a long-run competitive equilibrium, the typical firm in the industry breaks even.