Monopolistically competitive firms
A) have market power because they can set price above marginal cost.
B) have no market power because they earn zero economic profit.
C) have no market power because of free entry.
D) have no market power because price equals marginal cost.
A
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The above table gives some of the costs of the Delicious Pie Company. What is the average variable cost of producing 300 pies?
A) $1,800 B) $6 C) $5 D) More information is needed to calculate the average variable cost.
Which expression below matches most closely the way economists go about testing their models?
A) "Consistency is the hobgoblin of small minds." B) "Seeing the results is the only way to know if you are right." C) "A bird in the hand is worth two in the bush." D) "In the long run we are all dead."