If the firm were a perfect competitor in the long run, how much would its output be?

If the Fed buys securities worth $10 million, then

A) bank reserves will increase by $10 million. B) bank reserves will decrease by $10 million. C) currency in circulation will increase by $10 million. D) bank holdings of securities increase by $10 million.

Although both perfectly competitive and monopolistically competitive firms earn normal profits in the long run, monopolistically competitive firms will not

a. operate where price equals marginal cost b. charge a higher price than firms in perfect competition c. produce a smaller quantity than firms in perfect competition d. produce where price equals average total cost e. exit when demand falls below long-run average costs