In the long run, a monopolistically competitive firm will set price:
A. at the intersection of the marginal cost and demand curves.
B. at the intersection of the average total cost and demand curves.
C. higher than the competitive level, but lower than the monopoly price.
D. higher than the marginal cost, but lower than average total cost.
Answer: C
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Bananaland produces only bananas and sunscreen and the quantities and prices for 2012 and 2013 are given in the table above. The base year is 2012. In 2013, which is larger, nominal GDP or real GDP?
A) Both are the same size. B) Nominal GDP is larger. C) Real GDP is larger. D) The answer is ambiguous. E) More information is needed to determine which is larger.
Explain the difference between a movement along the aggregate demand curve and a shift of the aggregate demand curve
What will be an ideal response?