A) MR = MC; if a firm is making zero economic profits, it will immediately leave the industry.
B) MR = MC; if a firm is making negative economic profits it will immediately leave the industry.
C) MR = MC < P; a firm can make positive, negative or zero economic profits.
D) MR = ATC < P; a firm makes positive economic profits.
E) None of the above.
Correct Answer
verified
C
Correct Answer
verified
A) P > MC = MR; there is a DWL.
B) P = MC; there is no DWL.
C) P must be equal to ATC, and there is a positive DWL.
D) P < AVC, there is a DWL
E) As the firm faces a perfectly elastic demand curve at the market price, MR = MC = P, and there is no DWL.
Correct Answer
verified
Correct Answer
verified
A) MR = MC ≤ P = ATC in the long run
B) ATC is minimized in the long run.
C) MC = P > ATC and a firm can earn positive economic profits in the long run.
D) MC = ATC = P in the long run equilibrium.
E) None of the above.
Correct Answer
verified
A
Correct Answer
verified
A) Firms can earn positive economic profits.
B) Firms can earn negative economic profits.
C) Firms can earn zero economic profits.
D) Firms are profit maximizers, setting MR = MC if they produce a positive level of output.
E) All of the above statements are true.
Correct Answer
Answered by ExamLex AI
Correct Answer
Answered by ExamLex AI
A) The product variety effect suggests that there will be too much entry in a monopolistically competitive industry.
B) The product variety effect suggests that a firm in a monopolistically competitive industry is more likely to shut down.
C) The business stealing effect suggests that there is too little entry in a monopolistically competitive industry.
D) Depending on the relative importance of the business stealing and the product variety effects, there can be too much or too little entry in a monopolistically competitive industry.
E) None of the above.
Correct Answer
verified
D
Correct Answer
verified
Showing 1 - 5 of 5
Related Exams