Which of the following is true about long-run equilibrium in a monopolistically competitive market?
a. Firms earn zero economic profit because price equals long-run average cost, but the equilibrium is not allocatively efficient because price exceeds the marginal cost of the last unit produced.
b. They may earn negative, zero, or positive economic profit because monopolistically competitive firms are price takers.
c. Each firm faces a perfectly elastic demand curve and earns zero economic profit because price equals long-run average cost, and are allocatively efficient because price equals marginal cost for the last unit sold.
d. None of the above are correct.
a
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Goods and services are scarce because
a. people are greedy b. they are produced using scarce resources c. firms keep production low in order to earn higher profits d. they are produced by firms that seeks profits e. government wants to maintain its power over the economy
If goods imports are greater than goods exports, the nation is experiencing a:
a. negative balance on current account. b. goods trade deficit. c. capital account imbalance. d. weakening of its currency. e. growth in foreign reserves.