In a monopolistically competitive market if the additional revenue generated from advertising equals the additional cost of advertising, the firm should
A) advertise more to increase sales.
B) advertise more to lower marginal costs.
C) maintain its current amount of advertising.
D) advertise less to decrease costs.
C
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How would each of the following events affect Cheryl Shirker's supply of labor?
(a) Cheryl's firm announces a reorganization plan, in which she will get a big promotion and raise in six months. (b) Cheryl's speculative investment in plutonium futures pays off big, netting her a profit of $300 thousand. (c) Cheryl's father, who had planned to leave her a large bequest, must spend all his wealth on medical bills after a prolonged illness.
Which of the following is a characteristic of a competitive price-taker market?
A. Profit maximizing firms in the market will expand output until price equals average variable cost. B. The market demand curve for the product is a horizontal line. C. There are many firms in the market, each producing a small share of total market output. D. The product produced by each of the firms is differentiated.