Author Question: A picture frame company operates in a monopolistically competitive market. Its short-run equilibrium ... (Read 59 times)

Bernana · **on:** Jun 30, 2018

A picture frame company operates in a monopolistically competitive market. Its short-run equilibrium price is 80 and its ATC is 65 . It sells 100 picture frames a week. From this we can tell:
a. this firm is making a normal profit.
b. other picture frame companies will want to exit the market.
c. there are no other picture frame companies in the area.
d. economic profits are 1,500.
e. total profits are being maximized.

Question 2

As one moves down and along a budget line, its slope decreases.
a. True
b. False
Indicate whether the statement is true or false