What is an economic variable?
What will be an ideal response?
An economic variable is something measurable that can have different values, such as the wages of software programmers.
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In general, monopolistically competitive firms earn profits _____.
(A) Higher than oligopolies. (B) Slightly above their costs in the long run. (C) Well above their costs in the long run. (D) About the same as oligopolies.
How does the long-run equilibrium of a monopolistically competitive industry differ from that of a perfectly competitive industry?
A) A firm in monopolistic competition will charge a price higher than the average cost of production but a firm in perfect competition charges a price equal to the average cost of production. B) A firm in monopolistic competition will earn economic profits but a firm in perfect competition earns zero profit. C) A firm in monopolistic competition produces an allocatively efficient output level while a firm in perfect competition produces a productively efficient output level. D) A firm in monopolistic competition does not take full advantage of its economies of scale but a firm in perfect competition produces at the lowest average cost possible.