Firm A charges $8.50 for each unit of Good X. If the average total cost of producing 1,000 units of Good X is $12 and the market for Good X is monopolistically competitive, Firm A ________ by producing 1,000 units of Good X
A) earns a profit of $3,500
B) earns a profit of $1,000
C) incurs a loss of $1,000
D) incurs a loss of $3,500
D
Economics
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Which of the following statements about private and social costs is TRUE in the presence of negative externalities created by pollution?
A) Competitive market produces excessive pollution. B) The optimal amount of pollution is zero. C) Social costs exclude externalities. D) Social producer surplus exceeds private producer surplus.
Economics
The classical model's theory of the interest rate does not apply in the short run
a. True b. False
Economics