In the long run a perfectly competitive firm operates ____ and a monopolistically competitive firm operates ____
a. at the efficient scale; with excess capacity
b. at the efficient scale; at the efficient scale
c. with excess capacity; with excess capacity
d. with excess capacity; at the efficient scale
a
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Which of the following is most likely to increase the supply of corn?
a. The farm worker's union successfully negotiates a pay increase for corn harvest workers. b. The Surgeon General announces that eating corn bread contributes to baldness in men. c. Congress and the President eliminate subsidies formerly paid to corn farmers. d. Farmers that grow soybeans can also grow corn, and the price of soybeans drops by 75 percent.
What happens to a production possibilities frontier (with capital goods on the vertical axis and consumption goods on the horizontal axis) when there is technological improvement?
a. The entire frontier shifts outward. b. The upper part shifts outward while the lower part shifts inward. c. Nothing; there is no movement of the frontier. d. The entire frontier shifts inward. e. The lower part of the curve shifts outward while the upper part shifts inward.