Firms in monopolistic competition can make an economic profit in the long run. (True or false?)

Firms in monopolistic competition can make an economic profit in the long run.

Indicate whether the statement is true or false

Ques. 2

A marginal cost pricing rule for a natural monopoly sets ________.

A) price equal to marginal cost and greater than average total cost
B) marginal revenue equal to marginal cost
C) marginal revenue equal to average total cost
D) price equal to marginal cost

Ques. 3

If insured drivers decide to drive more recklessly than uninsured drivers do, then an adverse selection has occurred.

Indicate whether the statement is true or false

Ques. 4

In the above figure, income is 8, the price of a soft drink is 1, and the initial price of a milkshake is 2. If the price of a milkshake decreases to 1, milkshakes are revealed to be

A) an inferior good.
B) a normal good.
C) less preferred than soft drinks.
D) None of the above answers is correct.

Ques. 5

According to the table above, ________ percent of total income is redistributed to the lowest income group.

A) 4.7
B) 2.3
C) 1.5
D) 3.8

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Firms in monopolistic competition can make an economic profit in the long run. (True or false?)

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