As long as firms currently in a monopolistically competitive market are earning profits:
A. more firms will leave the market before the profits are competed away.
B. the government will step in to regulate prices to ensure they stay competitive.
C. the firm will lower its price to keep out competitors.
D. more firms will enter the market with products that are close substitutes.
D. more firms will enter the market with products that are close substitutes.
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Apple, the consumer electronics giant, on Tuesday rolled out new versions of its popular iPhone. The CEO decided to decrease the price of iPhones in an attempt to increase total revenue from iPhone sales
One of his employees, Jess, disagrees and suggests that an iPhone price increase will increase total revenue. Who is CORRECT? A) The CEO is correct if demand is price elastic. B) The CEO is correct if demand is price inelastic. C) Jess is correct if demand is price elastic. D) Jess is correct if demand is unit elastic.
__________________ is the crucial characteristic of monopolistic competition.
A. Product differentiation B. Price discrimination C. Economies of scale D. Identical products
The sum of public spending on goods and services and transfer payments during a given period cannot exceed tax revenues plus borrowed funds. This is the statement for
A. the government budget constraint. B. ad valorem taxation. C. an excise tax. D. a sales tax.
The city in which a new casino is likely to have the greatest economic impact would be
A. Las Vegas (where many already exist). B. Denton, TX (north of Dallas, where no casinos already exist). C. Kansas City (where two already exist). D. St. Louis (where three already exist).