If a profit-seeking competitive firm is producing its profit-maximizing output and its total fixed costs fall by 25 percent, the firm should:
A. use more labor and less capital to produce a larger output.
B. not change its output.
C. reduce its output.
D. increase its output.
Answer: B
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The National Monetary Commission
A) was created by Congress to study the setting up of a central bank. B) authorizes open market operations. C) oversees nationally chartered banks. D) chooses Federal Reserve district bank presidents.
Which statement concerning monopolistic competition is false?
A. Long-run equilibrium under monopolistic competition and pure competition both entail zero economic profits for firms B. Monopolistic competition is likely to result in a greater variety of product brands than pure competition C. The monopolistic ally competitive demand curve is more elastic than the demand curve facing a monopoly D. Long-run equilibrium in monopolistic competition does not entail any economic inefficiency because of easy entry and exit