Suppose that a monopolistically competitive firm is in long-run equilibrium. The firm's demand curve is tangent to its average cost curve at Q = 25 . Average cost is minimized at Q = 35, where average cost is $50 . Which of the following is true?
a. This firm charges $50 for the good.
b. This firm charges more than $50 for the good.
c. This firm charges less than $50 for the good.
d. The firm has excess capacity at all output levels greater than 35 units.
e. Average cost is $50 at the profit-maximizing output level.
B
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Cartels are likely to be better able to prevent their members from cheating on an agreement: the greater the number of members in the cartel.
a. the fewer the number of members in the cartel b. the greater the number of members in the cartel. c. the greater are the differences in production costs across member firms. d. the greater are the differences in demand projections across member firms.
When profits occur in a competitive market, this indicates that
a. consumers value the goods more than the resources used to produce them. b. producers value the goods more than the resources used to produce them. c. producers value the goods more than consumers value the goods. d. consumers value the goods less than the resources used to produce them.