Wealth consists ultimately of

Explanations for the decline in U.S. productivity in the 1970s and 1980s include all of the following except:

a. difficulties with measuring service sector output. b. the entry into the labor force of many young, inexperienced workers. c. a wave of corporate mergers that reduced competition. d. rising oil prices.

A monopolistically competitive firm is producing 50 units of output in the short run where marginal cost is $3.00, average total costs are $5.00, price is $4.50, average variable cost is $4.00, and marginal revenue is $3.00. How much profit is the firm

making? What output recommendation would you make for the firm? What will be an ideal response?