The long-run equilibrium of monopolistic competition is characterized by
A) P = MC = ATC.
B) P = MC > ATC.
C) P = MR = MC.
D) P = ATC > MC.
D
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Suppose the market demand function for ice cream is Qd = 10 - 2P and the market supply function for ice cream is Qs = 4P - 2, both measured in millions of gallons of ice cream per year. Suppose the government imposes a $0.50 tax on each gallon of ice cream. The producer surplus after the tax is:
A. $3.56 million. B. $4.50 million. C. $1.89 million. D. $7.11 million.
A nation's monetary base changes when:
a. Central banks swap currencies with each other. b. Funds cross our imaginary line. c. The central bank reduces the reserve requirement. d. All of the above. e. None of the above.
When the absolute value of the price elasticity of demand falls in the range of 0 and 1, demand is said to be ________ , when it equals 1, demand is said to be ________ , and when the price elasticity of demand is greater than 1, demand is said to be ________
a. elastic, unitary elastic, inelastic b. inelastic, unitary elastic, elastic c. unitary elastic, elastic, inelastic d. inelastic, elastic, unitary elastic
If the MPC is .5, the multiplier is
A. .5. B. 1. C. 2. D. 4.