Suppose that there are 50 firms in a monopolistically competitive industry in country A and 50 firms in the same monopolistically competitive industry in country B. If country A and country B engage in international trade, we expect that the total number of firms in this industry:
a. will increase.
b. will decrease.
c. will remain unchanged.
d. will first decrease, then increase.
Ans: b. will decrease.
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An effective price support ________ producers and ________ a deadweight loss
A) has no effect on; does not create B) benefits; creates C) harms; creates D) benefits; does not create E) harms; does not create
If the government decreases the tax on cell phones, ________
A) the deadweight loss decreases B) the consumer surplus does not change because sellers will not lower the price of a cell phone C) the number of cell phones purchased does not change D) the market becomes less efficient because the government collects less tax revenue
The dynamic aggregate demand and aggregate supply model accounts for the price level rising every year
Indicate whether the statement is true or false
Holding money to meet unplanned expenditures and emergencies is known as
A) transactions demand. B) precautionary demand. C) asset demand. D) aggregate demand.