In the long run in monopolistic competition, firms
A) can earn an economic profit.
B) incur an economic loss.
C) can earn zero economic profit but not an economic profit.
D) shut down if they are earning zero economic profit.
E) earn either an economic profit or zero economic profit.
C
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We use the midpoint formula in computing the price elasticity of demand coefficient in order to:
A. Make the coefficient value become independent of whether price goes up or down B. Convert absolute changes into percent-changes C. Eliminate the negative sign of the coefficient D. Make the coefficient become equal to the slope of the demand curve
Sarah is considering lending an amount of $45,000 to her friend who promises to return $60,000 after the end of ten years
What is the net present value of Sarah's investment? Is it worthwhile to undertake this investment? Assume that the market rate of interest is 6%.