In a monopolistically competitive market, the number of firms adjusts until economic profits are driven to zero
a. True
b. False
Indicate whether the statement is true or false
True
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To maximize profit a monopolist will produce where
A) marginal revenue is equal to marginal cost. B) average total cost is equal to average revenue. C) demand for its product is unit elastic. D) revenue per unit is maximized.
A network effect exists whenever
A) a firm's willingness to produce a particular good or service is influenced by the costs of inputs it must utilize in order to manufacture the item. B) a consumer?s willingness to purchase a particular good or service is influenced by how many others also buy or have bought the item. C) a firm's willingness to purchase a particular factor of production depends on the other types of inputs it utilizes to manufacture an item. D) a consumer's willingness to purchase a particular good or service is influenced by the prices of other complementary or substitute items.
The equilibrium price level
a. determines by how much the AD curve shifts b. is inversely related to the nominal wage rate c. is influenced by the pricing behavior of all the firms in the economy d. is unaffected by changes in resource costs e. is the same thing as the interest rate
Unexpectedly high inflation tends to hurt _______ most.
A. businesses B. borrowers C. policy makers D. lenders