ECON 301 Lecture 13: ECON301 - Lecture 13 - Theory of the Firm, Day 1
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12. Although both perfectly competitive and monopolistically competitive firms earn only normal profits in the long run, monopolistically competitive firms will not operate where price equals marginal cost--which would be the case under perfect competition.
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Question 132.5 pts
13. In an oligopoly, a minimum efficient scale is large relative to the market.
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Question 142.5 pts
14. Ceteris paribus: if Ford raises the price of its automobiles, the demand curve for GM automobiles shifts to the right.
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Question 152.5 pts
15. It is harder to explain the behavior of firms in oligopoly than in other market structures because in oligopoly firms base their decisions on what their rivals do or might be expected to do in reaction to their decisions.
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