In the long run, profits will equal zero in a competitive market because of
A) constant returns to scale.
B) identical products being produced by all firms.
C) the availability of information.
D) free entry and exit.
D
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This market situation is much like a pure monopoly except that its member firms tend to cheat on agreed upon price and output strategies. What is it?
A) Duopoly B) Cartel C) Market sharing monopoly D) Natural monopoly
Tax incidence:
A. depends on the relative elasticity of the supply and demand curves in a market. B. depends on whether it is a buyers tax or sellers tax that is being imposed. C. depends on the amount of tax revenue generated once administrative burdens are taken into account. D. depends on whether the tax revenue is greater than the deadweight loss caused by the tax.
The tendency of changes in asset prices to affect spending on consumption goods is called the ________ effect.
A. multiplier B. substitution C. income D. wealth
In order to predict changes in aggregate demand, it must be possible to forecast
A. changes in the demand for investment goods. B. changes in the demand for consumer goods. C. changes in the demand for money. D. All of the choices are correct.