A firm in monopolistic competition makes its decisions on quantity and price by
A) taking price as given from the market and producing where MR = MC.
B) taking both price and quantity as given from the market.
C) producing where MR = MC and setting the price for this quantity from the demand curve.
D) taking quantity as given from the market and setting the price for this quantity from the demand curve.
E) producing where MR = MC and setting the price so that P = MR = MC.
C
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Suppose the government used the following formula to compute a family's tax liability: Taxes owed = 28% of income - $8,000 . How much would a family that earned $20,000 owe?
a. -$8,000 b. -$2,400 c. $0 d. $2,400
If an oligopolist's competitors follow its price cuts but ignore its price increases, the oligopolist will face a gap in its marginal revenue schedule.
Answer the following statement true (T) or false (F)