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Author Question: The ability to set a price greater than marginal cost guarantees an economic profit for the ... (Read 18 times)

CORALGRILL2014

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on: Jul 1, 2018
The ability to set a price greater than marginal cost guarantees an economic profit for the monopolistic competitor (assuming P > AC).
 
  Indicate whether the statement is true or false

Question 2

The marginal expenditure of a monopsonist is 4. The wage it currently pays is 3. The labor supply curve has a constant elasticity. What is the elasticity of the labor supply?
 
  A) 0.33
  B) 0.66
  C) 1
  D) 3


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wfdfwc23

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Reply #1 on: Jul 1, 2018
Answer to Question 1

False. Although the firm is a price setter entry in the long run will drive price down until no economic profit exists.

Answer to Question 2

A


CORALGRILL2014

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Reply 2 on: Jul 1, 2018
:D TYSM

mjenn52

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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