When the excess capacity problem under monopolistic competition becomes greater, there will be:
A. a wider range of consumer choice.
B. fewer advertisements and promotions.
C. more entry by firms into the market.
D. a narrower range of consumer choice.
Answer: A
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Between 2001 and 2015, equilibrium college tuition rose from $15,000 to $27,000 and equilibrium enrollment increased from 16 million to 21 million students. These changes could be the result of
A) an increase in demand. B) an increase in supply. C) a decrease in demand. D) a decrease in supply.
The number of CDs purchased increased by 50 percent when consumer income increased by 10 percent. Assuming other factors are held constant, CDs would be classified as:
a. social goods. b. normal goods. c. Giffen goods. d. inferior goods.
A Luddite is:
A. a worker whose real wage rises as a result of globalization. B. a consumer who refuses to buy imported goods, even if they are cheaper. C. a fictional character from American folk history. D. someone who opposes the introduction of new technologies.
An excise tax on gasoline causes
A. the market clearing price of gasoline to rise. B. supply of gasoline to shift to the left. C. a reduction in the quantity of gasoline demanded. D. All of these are correct.