An industry comprising 40 firms, none of which has more than 3 percent of the total market for a differentiated product, is an example of
A) monopolistic competition.
B) oligopoly.
C) pure monopoly.
D) pure competition.
Ans: A) monopolistic competition.
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Suppose the price of leather used to produce shoes increases. The higher price of leather ________ the supply of shoes, and the supply curve of shoes ________
A) does not change; does not shift B) decreases; shifts rightward C) increases; shifts rightward D) increases; shifts leftward E) decreases; shifts leftward
According to this Application, because Argentina pegged its currency to the U.S. dollar, the appreciation of the dollar caused a large trade deficit in Argentina. This trade deficit meant that
A) the demand for Argentinean pesos exceeded the supply of the pesos. B) the demand for Argentinean pesos exceeded the supply of U.S. dollars. C) the supply of Argentinean pesos exceeded the demand for the pesos. D) the supply of Argentinean pesos exceeded the demand for U.S. dollars.
Refer to Scenario 1-4. Using marginal analysis terminology, what is another economic term for the incremental revenue received from the sale of the last 500 cigars?
A) sales revenue B) gross earnings C) gross profit D) marginal revenue
Starting from short-run equilibrium, the following occurs: the money supply increases and labor productivity increases. What is the effect on the price level and Real GDP in the short run?
A) Real GDP falls and the price level necessarily rises. B) Real GDP rises and the price level necessarily rises. C) Real GDP rises and the effect on the price level cannot be determined. D) Real GDP falls and the effect on the price level cannot be determined. E) none of the above