Which of the following correctly describes the profit-maximizing level of output selected by a monopolistically competitive firm in the short run?
a. Output is set in the short run where marginal cost equals price.
b. Output is set in the short run where marginal cost equals marginal revenue.
c. Firms will shut down in the short run even if price exceeds average variable cost at the rate of output selected by the firm.
d. Firms will shut down in the short run even if price equals marginal cost.
b
Economics
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As the price level ________, the purchasing power of money ________
A) decreases; stays the same B) increases; decreases C) decreases; decreases D) increases; increases
Economics
Explain why the long-run total cost curve, not the short-run total cost curve, shows the lowest cost of producing any level of output. Is there an exception?
What will be an ideal response?
Economics