The exit of firms from a monopolistically competitive market structure causes the demand curves facing the existing sellers to shift ________ and to become ________
A) leftward; flatter
B) rightward; flatter
C) leftward; steeper
D) rightward; steeper
D
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Consider two economies: A and B. If the gap between the growth rate of money supply and growth rate of real GDP is larger in country A than in country B, then according to the quantity theory of money:
A) the inflation rate will be lower in country A. B) the inflation rate will be higher in country A. C) real interest rates will be higher in country A. D) nominal interest rates will be lower in country A.
The rate of interest banks charge other banks for overnight loans of reserves is the
A) prime rate. B) discount rate. C) federal funds rate. D) real rate.
Two common economic problems that may arise from asymmetric information are:
A. moral consequence and adverse selection. B. moral hazard and adverse selection. C. moral hazard and adverse decisions. D. moral consequence and adverse decisions.
Which of the following best summarizes the importance of business failure and the central idea of "creative destruction in a market economy"?
What will be an ideal response?