A monopolistically competitive firm is like a monopoly firm insofar as
A) both face perfectly elastic demand.
B) both earn an economic profit in the long run.
C) both have MR curves that lie below their demand curves.
D) neither is protected by high barriers to entry.
Ques. 2A cartel is a group of firms which agree to
A) behave competitively.
B) raise the price of their product.
C) lower the price of their product.
D) increase the amount they produce.
Ques. 3Which of the following is not necessarily true for a profit-maximizing single-price monopolist?
A) P > ATC
B) P > MC
C) P > MR
D) MR = MC
Ques. 4In the United States, the percentage of households that have incomes below the mean income is
A) 50 percent.
B) less than 50 percent.
C) more than 50 percent.
D) 0 percent.
Ques. 5A firm's total fixed cost (TFC) is a cost
A) it is certain (fixed) that the firm must pay.
B) that does not change as output changes.
C) that is dependent on marginal cost.
D) that is paid in only the long run.
Ques. 6Where large amounts of capital are used, the dominant form of business organization is the
A) corporation.
B) partnership.
C) proprietorship.
D) partnership in manufacturing and the corporation in finance.
Ques. 7The above figure shows the market for blouses. The government decides to impose the sales tax on sellers, as shown in the figure. The tax decreases consumption by
A) 1,000 blouses.
B) 2,000 blouses.
C) 3,000 blouses.
D) 4,000 blouses.
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