Refer to Figure 26.1 for a monopolistically competitive firm. The profit-maximizing output and price combination for this firm in the short run is
A. Q1,P1.
B. Q2,P1.
C. Q4,P3.
D. Q2,P4.
Answer: D
You might also like to view...
If the demand for a product is elastic, then a rise in price will:
a. cause total spending on the good to increase. b. cause total spending on the good to decrease. c. keep total spending the same, but reduce the quantity demanded. d. keep total spending the same, but increase the quantity demanded.
The demand curve facing a monopolistically competitive firm is generally
a. steeper than the demand curve that would face a perfectly competitive firm in the same industry. b. less elastic than the demand curve that would face a monopoly in the same industry. c. steeper and more elastic than the demand curve that would face a perfectly competitive firm in the same industry. d. flatter than the demand curve that would face a monopoly in the same industry.
If there were a favorable supply shock and the central bank wanted to offset the change in the unemployment rate, what would it do?
There are several types of barriers to entry that can create a monopoly. Which of the following barriers is the result of government action?
A) network externalities B) public franchise C) economies of scale D) control of a key resource