Question:

If the Average Total Cost curve of a firm in monopolistic competition happens to beabove the demand curve, it means:

A.

the firm will have to sell a lot in order to make a profit

B.

the firm will have to sell at a very high price in order to make a profit

C.

other firms are performing better in the market than the firm depicted in the diagram

D.

that firms in that industry will be incurring losses in the short run

Answer» d. that firms in that industry will be incurring losses in the short run

Question:

Inflation represents:

A.

fall in price level

B.

increase value of money

C.

decrease value of money

D.

None

Answer» c. decrease value of money

Question:

At the profit-maximizing level of output, a monopolist will always operate where:

A.

price is greater than marginal cost.

B.

price is greater than average revenue.

C.

average total cost equals marginal cost.

D.

total revenue is greater than total cost.

Answer» a. price is greater than marginal cost.

Question:

As the value of MPC increases, the value of multiplier:

A.

Decreases

B.

Increases

C.

Constant

D.

Cannot say

Answer» b. Increases