How does the short-run equilibrium of a monopolistic competitor differ from a monopolist? How does it differ from a perfect competitor?
What will be an ideal response?
The short-run equilibrium of a monopolistic competitor looks just like that for a monopolist, with the exception that the demand curve facing the monopolist will be less elastic than the demand curve facing the monopolistic competitor. The equilibrium differs from a perfect competitor in that the demand curve slopes down, so price is greater than marginal cost.
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Refer to the production possibilities frontier in the figure above. Which of the following movements requires the largest opportunity cost, in terms of good Y forgone, per extra unit of good X?
A) from point a to point b B) from point b to point c C) from point c to point d D) from point d to point e
When an employer has a right to hire anyone, but every nonunion worker hired must join the union within a certain period of time, this is
a. illegal b. a union shop c. a closed shop d. an elastic shop e. a strike