A firm in monopolistic competition that is maximizing profit ________
A. always makes a positive economic profit in the short run
B. never needs to shut down because its price always exceeds minimum average variable cost
C. might, in the short run, sell at a price that is less than average total cost
D. shuts down temporarily if it incurs a loss equal to total variable cost
C In the case of answer C, the firm incurs an economic loss.
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For most years since 1980, the natural unemployment rate was higher in Canada than in the United States. What possible explanation for some of this difference has been suggested?
What will be an ideal response?
Including investment and production in the two-good, two-period model with trade
A) allows the country to equalize absorption and output demand. B) renders terms of trade endogenous. C) allows the country to react to changes in the interest rate. D) allows the government to run budget deficits.