A monopolistically competitive firm differs from a perfectly competitive firm in the long run in that
A) the demand curve faced by a monopolistically competitive firm is downward sloping, while the demand curve faced by a perfectly competitive firm is horizontal.
B) profits are positive for a monopolistically competitive firm and zero for a perfectly competitive firm.
C) profits are zero for a monopolistically competitive firm and positive for a perfectly competitive firm.
D) marginal cost equals the market price for a monopolistically competitive firm but not for a perfectly competitive firm.
Answer: A
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There is only one firm in a small island country. The firm produced 1,000 units of Good X during a particular year out of which it could sell 900. If each unit of the good sells for $500, what is the gross domestic product of the country?
A) $150,000 B) $450,000 C) $40,000 D) $500,000
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