Monopolistic competition is similar to perfect competition in that:
A. firms earn economic profits in the long run
B. there are a large number of firms
C. firms face downward-sloping demand curves
D. both a and b
E. all of the above
Answer: B
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The stronger that consumer demand is for a good or service, other things being equal,
a. the higher its price. b. the lower its price. c. the more stable its price. d. the less stable its price.
The Jones family has an average tax rate of 15 percent. Its marginal tax rate is
A. less than 15 percent. B. 15 percent. C. more than 15 percent. D. impossible to find.
The Bureau of Labor Statistics measures unemployment by surveying:
A. a sample of about 60,000 households every month. B. every business at least once a year. C. every household at least once a year. D. a sample of about 60,000 employers every month.
Exhibit 2-2 Production possibilities curve
In Exhibit 2-2, the slope of the production possibilities curve indicates that the opportunity cost of:
A. coffee is constant. B. coffee is increasing. C. coffee is decreasing. D. corn is increasing.