Author Question: Tombstones are produced in a monopolistic competitive market. One producer, Rolling Stones, sells 20 ... (Read 77 times)

vinney12 · **on:** Jun 30, 2018

Tombstones are produced in a monopolistic competitive market. One producer, Rolling Stones, sells 20 tombstones a week at a price of 500 each. Its average total cost is 600 . From this information, we can tell:
a. new tombstone firms will want to enter.
b. this producer is losing 2,000 a week.
c. this producer is making an economic profit of 400.
d. this producer is setting MR = MC.
e. this producer should increase production.

Question 2

A budget line represents all the combinations of two good a consumer can buy with a given amount of money and fixed prices for the goods.
a. True
b. False
Indicate whether the statement is true or false