12)Refer to Figure 13-11.The firm represented in the diagramA) makes zero economic profit.B) makes zero accounting profit.C) should exit the industry.D) should expand its output to take advantage of economies of scale.Answer:A
13)Refer to Figure 13-11.What is the productively efficient output for the firm represented inthe diagram?D
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14)Refer to Figure 13-11.What is the allocatively efficient output for the firm represented inthe diagram?C
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16)Refer to Figure 13-11.What is the amount of excess capacity?B
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17) Why do most firms in monopolistic competition typically make zero profit in the long run?A) because firms produce differentiated productsB) because the lack of entry barriers would compete away profitsC) because firms do not produce at their minimum efficient scaleD) because the total market is not large enough to accommodate so many firmsAnswer:B
25) Which of the following describes the relative positions of the demand curve and the averagetotal cost (ATC) curve of a monopolistically competitive firm that earns a profit in the short run?A
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