Answer the following questions true (T) or false (F)
1. When a monopolistically competitive firm breaks even in the long run, this is equivalent to earning a zero accounting profit.
2. A monopolistically competitive firm can increase its profits beyond the long-run equilibrium break-even level by deliberately lowering its price to force some of its competitors out of the market.
3. If some monopolistically competitive firms exit their market after suffering short-run losses, the demand curves of remaining firms will shift to the right.
1. FALSE
2. FALSE
3. TRUE
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All points on the long run Phillips curve that are sustainable in the long run due to economy's self correcting mechanism correspond to
a. the mature rate of unemployment. b. the natural rate of unemployment. c. the seasonal rate of unemployment. d. the cyclical rate of unemployment.
In a progressive income tax system
A) the marginal tax rate exceeds the average tax rate. B) the average tax rate exceeds the marginal tax rate. C) high income earners pay a lower percentage of their income in taxes than do low income earners. D) the tax rate depends solely on how long an individual has been in the labor force.