In the short run, a monopolistically competitive firm
a. must earn zero economic profit
b. may earn positive or negative economic profits
c. will produce output up at the point where TR = TC
d. will be protected from competition by barriers to entry
e. will equate price and marginal cost
B
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In the economy of Brightland, the commercial banks have deposits of $600 billion. Their reserves are $60 billion. All reserves are in deposits with the Central Bank and the commercial banks hold no excess reserves
There is $120 billion in Central Bank notes outside the banks, and there are no coins. a) What is the economy's monetary base? b) What is the quantity of money in the economy? c) Calculate the money multiplier. d) Suppose the Central Bank of Brightland undertakes an open market purchase of securities of so that the monetary base increases by $5 billion. By how much will the quantity of money change?
In the long run under monopoly,
a. the MC curve will lie to the left of the output at which AC and AR meet. b. MC = MR = P. c. MC = MR = AR. d. the MC curve will lie to the right of the output at which AC and AR meet.