A monopolistically competitive industry has:
A. a few firms producing identical products.
B. many firms producing identical products.
C. a few firms producing differentiated products.
D. many firms producing differentiated products.
Answer: D
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Refer to Figure 7-3. On the above graph, identify the market equilibrium price and quantity, the efficient equilibrium price and quantity, and the value of the deadweight loss resulting from too few people receiving vaccinations
What will be an ideal response?
Don's Taxicab Service is the only taxi company operating in a large city. In the beginning, Don took over the local taxi market by buying out his competition. Now he sets his own rates as a privately-owned monopoly, but residents and tourists are upset by the very high prices. If there are no economies of scale in taxicab service, then the best solution is most likely
a. to encourage concentration by constructing barriers to entry b. laissez-faire since the market is clearly contestable c. antitrust action to break up Don's into a number of firms d. price regulation by a city commission e. for the city to take over and operate Don's Taxicab
Points that lie outside (or beyond) the PPF are
A) attainable. B) unattainable. C) efficient. D) inefficient.
A mixed economy
a) allocates resources according to supply but not demand. b) allocates resources according to demand but not supply. c) allocates resources according to demand and supply. d) allocates resources according to market forces and government intervention.