A monopolistically competitive firm earning profits in the short run will find the demand for its product decreasing and becoming more elastic in the long run as new firms move into the industry until
A) the original firm is driven into bankruptcy.
B) the firm's demand curve is perfectly elastic.
C) the firm exits the market.
D) the firm's demand curve is tangent to its average total cost curve.
D
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If aggregate output is below the natural rate level, nonactivists of policies would recommend that the government
A) do nothing. B) try to eliminate the high unemployment by attempting to shift the aggregate supply curve to the right. C) try to eliminate the high unemployment by attempting to shift the aggregate demand curve to the right. D) try to eliminate the high unemployment by attempting to shift the aggregate demand curve to the left.
What is the shape of the total revenue curve derived from a linear downward sloping demand curve?
A) Horizontal B) Vertical C) U-shaped D) Inverted u-shaped