Tombstones Are Produced in a Monopolistic Competitive Market

question 112

Multiple Choice

Tombstones are produced in a monopolistic competitive market. One producer, Rolling Stones, sells 20 tombstones a week at a price of $500 each. Its average total cost is $600. From this information, we can tell:

• A) new tombstone firms will want to enter.
• B) this producer is losing $2,000 a week.
• C) this producer is making an economic profit of $400.
• D) this producer is setting MR = MC.
• E) this producer should increase production.

Explain the effects of technological advancements on market outcomes.

Determine the consequences of changes in consumer income on inferior and normal goods.

Assess the impact of governmental regulations on market equilibrium.

Understand the effect of substitute and complementary goods on market dynamics.

---

Definitions:

Somatic

Relating to the body, especially as distinct from the mind.

Parasympathetic

A branch of the autonomic nervous system that conserves energy by slowing the heart rate, increasing intestinal and gland activity, and relaxing sphincter muscles.

American Sign Language (ASL)

A complete, natural language using hand movements, body language, and facial expressions for communication, primarily used by the deaf community in the United States and parts of Canada.

Left Hemisphere

The left side of the human brain, which is often associated with logical thinking, analytical processes, and language skills.