In the long run, marginal cost must equal marginal revenue for a monopolistic competitive firm, but not at the minimum point of the long-run average cost curve.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 2If fixed cost is 200,000 and variable cost is 30 per unit over the relevant range of output, when 10,000 units are produced, the average total cost will be:
a. 20.
b. 30.
c. 50.
d. 70.
QUESTION 3The Keynesian approach to government economic policy:
a. has emphasized the role of individual self-interest as a powerful stabilizing force.
b. has consistently failed to reduce fluctuations in economic activity.
c. was ineffective during the 1960s.
d. highlighted the role of aggregate demand.
e. was rechristened supply-side economics around 1980.
QUESTION 4In a monopolistic competitive industry, short-run economic profit encourages entry of new firms until there are no economic profits in the long-run.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 5When costs that vary with the level of output are divided by the output, you have calculated:
a. total changing cost.
b. total fixed cost.
c. average fixed cost.
d. average variable cost.