If a monopolistically competitive firm is suffering losses in the short run:
A. the exit of competing firms will cause price to drop, but not affect the firm's demand curve.
B. the exit of competing firms will shift the firm's demand to the right.
C. the exit of competing firms will shift the firm's demand to the left.
D. the exit of competing firms will cause price to rise, but not affect the firm's demand curve.
Answer: B
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The Wells Fargo Bank Tower in downtown Los Angeles displays a sign at its parking entrance that clearly shows that the per-hour parking charges are higher for people who visit the building for a short while. How is this consistent with the general principle of price discrimination?
Refer to the table below. If the price of labor declines from $3 to $2 per unit, then what is the least costly way of producing Zenias?
Suppose a firm can produce 70 units of a product, Zenia, by combining labor, land, capital, and entrepreneurial ability, as in the four alternative techniques shown in the table below. Assume further that the firm can hire labor at $3 per unit, land at $3 per unit, capital at $6 per unit, and entrepreneurship at $9 per unit.
A. A
B. B
C. C
D. D