Which of the following statements is TRUE about the relationship between a firm's demand curve under perfect competition and monopoly?
A) Under perfect competition, the demand curve is perfectly elastic; under monopoly, the demand curve has elastic, unit-elastic and inelastic portions.
B) Under monopoly, the demand curve is perfectly elastic; under perfect competition, the demand curve has elastic, unit-elastic and inelastic portions.
C) The demand curves for a monopoly and perfect competition are always inelastic.
D) We can define a demand curve under perfect competition but not under monopoly.
A
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In the long run, a perfectly competitive firm makes
A) a positive economic profit. B) zero economic profit. C) negative economic profit, that is, an economic loss. D) zero accounting profit. E) either a positive economic profit or a normal profit.
Refer to Figure 10.5. A shift from MP1 to MP3 will occur if
A) investors increase the short-term interest they expect in the future. B) investors increase the term premium they require on long-term bonds. C) the Fed decreases its target for the short-term nominal interest rate. D) the expected inflation rate decreases.