Author Question: Excess capacity in monopolistically competitive industries results because in equilibrium A) each ... (Read 15 times)

Frost2351 · **on:** Jul 1, 2018

Excess capacity in monopolistically competitive industries results because in equilibrium

A) each firm's output level is too great to minimize average cost.
B) each firm's output level is too small to minimize average cost.
C) firms make positive economic profit.
D) price equals marginal cost.

Question 2

Bill's utility function takes the form U(I) = exp(I) where I is Bill's income. Based on this utility function, we can see that Bill is:

A) risk averse
B) risk neutral
C) risk loving
D) He can exhibit two or more of these risk behaviors under this utility function.