Just like a monopolist, a monopolistically competitive firm:
A. sets the price according to marginal revenue and marginal cost; the demand curve doesn't matter.
B. cannot sell additional units of output without lowering the price.
C. is a price taker.
D. faces a perfectly elastic demand curve.
Answer: B
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If planned autonomous investment is 500, autonomous consumption 300, induced consumption 2500, savings 500, and government spending and taxes zero, then
A) Ep is 3300 and the economy is in equilibrium. B) Ep is 3300 and the economy is out of equilibrium. C) Ep is 3500 and the economy is in equilibrium. D) Ep is 3500 and the economy is out of equilibrium.
The introduction of a tax in a perfectly competitive marketplace that is originally in equilibrium will lower total surplus.
Answer the following statement true (T) or false (F)