Author Question: If the price of crude oil falls, the equilibrium price of gasoline ________ and the equilibrium ... (Read 122 times)

mcmcdaniel · **on:** Jun 29, 2018

If the price of crude oil falls, the equilibrium price of gasoline ________ and the equilibrium quantity ________.

A) rises; increases
B) rises; decreases
C) falls; increases
D) falls; decreases

Question 2

Which of the following is a difference between a monopolistically competitive market and a perfectly competitive market in the long run?

A) Firms in a monopolistically competitive market earn zero economic profits in the long run, while firms in a perfectly competitive market earn positive economic profits in the long run.
B) Firms in a monopolistically competitive market earn zero economic profits in the long run, while firms in a perfectly competitive market incur losses in the long run.
C) Firms in a monopolistically competitive market charge a price higher than marginal cost in the long run, while firms in a perfectly competitive market charge a price equal to marginal cost in the long run.
D) Firms in a monopolistically competitive market charge a price lower than marginal cost in the long run, while firms in a perfectly competitive market charge a price equal to marginal cost in the long run.