In the above figure of a monopolistically competitive firm, the marginal cost of the last unit produced is equal to ________ and is ________ marginal revenue.
A) P2; greater than
B) P3; greater than
C) P1; greater than
D) P1; equal to
Ques. 2Each point on the production possibilities frontier achieves allocative efficiency.
Indicate whether the statement is true or false
Ques. 3In the long run, perfectly competitive firms make zero economic profit. This result is due mainly to the point that a perfectly competitive market has
A) few buyers and sellers.
B) no barriers to entry and exit.
C) price taking by the firms.
D) firms with perfectly elastic market demand.
Ques. 4A free rider is a person who consumes a good without paying for it.
Indicate whether the statement is true or false
Ques. 5A labor market monopsony
A) has a marginal cost of labor curve that lies above the labor supply curve.
B) has a marginal cost of labor curve that lies below the labor supply curve.
C) is a labor market in which the firm has an elastic demand for labor.
D) is a labor market in which the firm has an inelastic demand for labor.
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