How is a monopolistically competitive firm similar to a monopoly firm?
A) Both produce where marginal revenue equals marginal cost.
B) Both will observe entry into the industry if economic profit is positive.
C) Both produce a unique good.
D) Both produce where price equals marginal cost.
A
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In the classical view, if desired saving exceeds desired investment
A) the interest rate would increase. B) government spending must rise. C) government spending must fall. D) the interest rate would decline.
You are the owner of an art supply store, selling both paint and paintbrushes. In order to maximize total sales you should
a. Decrease the price on the paint only b. Decrease the price on paintbrushes only c. Decrease the price on both the paint and the paintbrushes d. Increase the price on both the paint and the paintbrushes
If the estimated elasticity of supply coefficient equals 0.85, then: a. the supply curve is vertical
b. the demand curve is horizontal. c. supply is unit elastic. d. supply is relatively inelastic.
Macroeconomic models use abstract concepts such as "price level" and "national income" that are calculated by combining many markets into one. This process is known as
a. analysis and synthesis. b. integration and derivation. c. conceptualization. d. aggregation.