Which of the following is a difference between a monopolistically competitive market and a perfectly competitive market in the long run?
A) Firms in a monopolistically competitive market earn zero economic profits in the long run, while firms in a perfectly competitive market earn positive economic profits in the long run.
B) Firms in a monopolistically competitive market earn zero economic profits in the long run, while firms in a perfectly competitive market incur losses in the long run.
C) Firms in a monopolistically competitive market charge a price higher than marginal cost in the long run, while firms in a perfectly competitive market charge a price equal to marginal cost in the long run.
D) Firms in a monopolistically competitive market charge a price lower than marginal cost in the long run, while firms in a perfectly competitive market charge a price equal to marginal cost in the long run.
C
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The Cournot Model of Oligopoly assumes that
A) firms decide what quantity to produce. B) firms make their decisions simultaneously. C) firms do not cooperate. D) All of the above.
If the United States threatens to impose a tariff on Colombian coffee if Colombia does not remove agricultural subsidies, the United States will be
a. better off regardless of how Colombia responds. b. better off if Colombia removes the subsidies, and will be no worse off if it doesn't. c. worse off if Colombia doesn't remove the subsidies in response to the threat. d. worse off regardless of how Colombia responds.