Which of the following characterizes the difference between oligopoly and monopolistic competition?
A. Monopolistically competitive firms experience zero long-run economic profit; oligopolists may experience positive long-run economic profit.
B. Oligopolists are independent of each other; monopolistically competitive firms are interdependent.
C. Monopolistically competitive firms face horizontal demand curves; oligopolists face downward-sloping demand curves.
D. There are many oligopolists but only a few monopolistically competitive firms.
Answer: A
You might also like to view...
A Consumer Price Index of 120 for a certain year means that the average price of consumer items in that year was
A. 20% higher than the average price of the preceding year. B. 120% higher than the average price in the base period 1982-84. C. 20% higher than the average price in the base period 1982-84. D. about $120 per basket of consumer goods and services.
Find equilibrium price and quantity.
Contrary to behavior that would be required to eliminate output gaps, many firms in the economy:
A. intentionally set prices below equilibrium prices in order to create shortages. B. adjust their prices only periodically. C. only change the amount of output they produce in the long run, not in the short run. D. have fully-flexible prices that change constantly.
Matt is offered a job driving the campus shuttle bus from 4 p.m. to 6 p.m. each Monday. His reservation wage for this job is $7 per hour. Now suppose the director offers Matt $50 per hour, but also announces that the earnings from the job will be divided equally among Matt and four other students. Will Matt accept this job?
A. Yes, because $50 divided by five is greater than Matt's reservation wage. B. No, because it is not fair for Matt to do the work and then have to share the wage. C. No, because the other students are free riders. D. Yes, because Matt believes in the Rawlsian theory of justice.