For both a monopolist and a monopolistically competitive firm:
a. price equals average total cost.
b. price is above marginal revenue.
c. marginal revenue equals zero.
d. marginal cost equals zero.
b
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Refer to Figure 33-2. If the economy starts at A, a decrease in the money supply moves the economy
a. to A in the long run
b. to C in the long run
c. back to A in the long run
d. to D in the long run
Tony's Italian Ice is a monopolistically competitive firm. If Tony's earns a profit in the short run, which of the following is most likely to occur?
A) New firms that sell Italian ice will enter the market and Tony's demand curve will shift to the right. B) New firms that sell Italian ice will enter the market and Tony's demand curve will become more inelastic. C) New firms that sell Italian ice will enter the market and Tony's cost curves will shift to the left. D) New firms that sell Italian ice will enter the market and Tony's demand curve will shift to the left.