41. Perfect and monopolistic competition are similar in some ways, and different

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41. Perfect and monopolistic competition are similar in some ways, and different in similar? a way in which perfect competition and monopolistic competition are a. Fi b Firms in each of these market structures will charge P-MC b. In ach of these market structures, the tendency will be toward zero economic profit. c. For firms d. All of the above. in each of these market structures, the firm's demand curve is perfectly elastic. e. (a) and (b) only. 42. Investment projects tend to have a large portion of their costs early in the life of the project, with the coming later. Because of this, and because of the need to discount future costs and revenues, a firm would be more likely to approve a project if a. the interest rate is higher. b. the interest rate is lower. c. the project can be completed quickly, so the revenues can begin to be realized relatively early in the life of the project d. none of the above e (b) and (c). 43. The supply curve for zlabkots is graphed as a vertical line. In other words, the supply of zlabkots is perfectly inelastic. The demand for zlabkots increases (i.e., the demand curve for zlabkots shifts to the right). What will happen to the equilibrium price and quantity of zlabkots? a. Price will increase, quantity will increase. b. Price will increase, quantity will stay the same. c. Price will stay the same, quantity will increase. d. Price will decrease, quantity will stay the same. e. The answer to this question is unknowable 44. The market for blingdorfs is characterized by a horizontal (i.e., perfectly elastic) net-of-tax supply curve, at P-$10. The demand curve is Qu 30 - P Now, a tax of $5 per unit is imposed. The tax raises the gross-of-tax supply curve to P-$15. How much tax revenue will the government collect? a. $ 15 b. 30 c. $ 50 d. 75 e. $ 100 45, In the last few decades, the percentage of the Michigan economy that is devoted to state and local taxes has a. increased substantially b. stayed remarkably constant. c. decreased substantially d. bounced around wildly, in a completely random fashion. e changed in ways that are unknowable. 10

Explanation / Answer

41. In perfect competition and monopolistic competition the firms strive to maximise their profit i.e tend to zero economic profits in the long run.

So, option c)

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