Assuming Identical Production Functions and Cost Curves, the Long-Run Equilibrium

question 23

Multiple Choice

Assuming identical production functions and cost curves, the long-run equilibrium of a monopolistically competitive firm, as compared with a perfectly competitive firm, is such that, for the former, price is:

• A) higher and output is greater.
• B) higher and output is smaller.
• C) lower and output is greater.
• D) lower and output is smaller.

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Definitions:

Frictional Unemployment

Unemployment that results because it takes time for workers to search for the jobs that best suit their tastes and skills

Job Losers

Individuals who have been involuntarily terminated or laid off from their employment.

Data On Unemployment

Statistical information relating to the number of unemployed individuals in the workforce, often presented as an unemployment rate.

Frictional Unemployment

Short-term unemployment that occurs when people are between jobs or entering the workforce for the first time, often seen as a natural part of a healthy economy.