Monopolistically competitive firms have excess capacity. To maximize profits, firms will
a. increase their output to lower their average total cost of production and eliminate the excess capacity.
b. produce where price equals marginal cost to eliminate the excess capacity.
c. produce where average revenue equals marginal cost to eliminate the excess capacity.
d. maintain the excess capacity.
d
Economics
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Between 1981 and 1986, as the federal budget deficit increased,
A. consumption spending fell. B. investment spending was crowded out. C. net exports increased. D. net exports were crowded out.
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