A monopolistically competitive firm and a monopoly are similar because
A) each firm can raise its price without losing all of its sales.
B) both firms must behave strategically toward other firms in the industry.
C) both firms always operate at their point of minimum average total cost.
D) each firm has a large number of small competitors.
E) both firms will earn zero profits in the long run.
Ans: A) each firm can raise its price without losing all of its sales.
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Which of the following conditions define a perfectly competitive market?
a. The transaction costs are very high. b. Information is available to participants at a high cost. c. The product is homogenous. d. There are limited number of buyers and sellers.
Suppose agricultural technology results in increased grain yield for U.S. farmers. The increased supply of grain will drive down grain prices. Because the demand for grain is price elastic, lower prices will result in lower total farm revenue
Indicate whether the statement is true or false