1. Suppose Wave detergent is sold in a monopolistically competitive market. If the price of Wavedetergent is currently $6 and the ATC is $4, in the long-run we expect
a. The demand curve for Wave to shift to the left
b. The demand curve for Wave to shift to the right
c. The producers of Wave to go out of business
d. The producers of Wave to earn economic profits greater than zero
e. The producers of Wave to earn economic losses
2. In the long run, there will be no unexploited scale economies (excess capacity) in
a. competitive markets
b. monopolistically competitive markets
c. oligopoly markets
d. monopoly markets
3. A perfectly price-discriminating monopolist is able to
a. exercise illegal preferences regarding the race and/or gender of its employees.
b. maximize profit and produce a socially-optimal level of output.
c. maximize profit, but not produce a socially-optimal level of output.
d. produce a socially-optimal level of output, but not maximize profit.