Regarding new inventions, which of the following statements is not true?
A. A new invention typically has little competition.
B. This effective monopoly on the market earns the inventor abundant profit.
C. That profit gets the attention of other potential inventors, who create competing products.
D. Reduced to zero economic profits, the inventor goes out of business.
Answer: D
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Easy entry and exit ensure that perfectly competitive firms cannot make a long-run economic profit
Indicate whether the statement is true or false
In the RBC model, the importance of "intertemporal substitution" of labor supply is ________, which results in a rather ________ labor supply curve
A) denied, flat B) denied, steep C) emphasized, flat D) emphasized, steep
Refer to Figure 4.2. A shift from D2 to D1 will result from which of the following?
A) an increase in expected future profits B) an increase in net exports C) an increase in corporate taxes D) a decrease in tax credits for savings
Most of the TARP funds were used to
A) fund a stimulus package. B) pay for losses incurred by Fannie Mae and Freddie Mac. C) finance the operations of the Federal Reserve. D) make direct purchases of preferred stock in banks to increase their capital.