The smallest quantity of output at which long-run average cost is at a minimum is a firm's OA. minimum efficient scale OB. profit-maximizing output point OC. efficient output point OD. maximum efficient scale In a market in which the smallest output at which long-run average cost reaches its lowest level is large relative to market demand, the market is OA. perfectly competitive OB. either an oligopoly or monopoly OC. experiencing growth OD. monopolistically competitive
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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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