Entry and exit drive each firm in a monopolistically competitive market to a point of tangency between its
a. marginal revenue curve and its total cost curve.
b. marginal revenue curve and its average total cost curve.
c. demand curve and its total cost curve.
d. demand curve and its average total cost curve.
d
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Which of the following would be classified as a fixed cost for the proprietor who owns and operates the local Texaco station?
A) the federal excise tax paid on each gallon of Texaco gasoline sold B) the state income tax on the profit earned C) the rent paid on the 10 year lease for the property on which the station is located D) the Social Security tax the owner pays the federal government on the owner's income
In the short run, the profitability of monopolistic competition _______ that of perfect competition; in the long run the profitability of monopolistic competition _______ that of perfect competition.
Fill in the blank(s) with the appropriate word(s).