In the long run when monopolistically competitive firms advertise,
a. they will still earn zero economic profit
b. they can earn positive economic profit by increasing market share
c. the market price must fall
d. the market price must rise
e. there will be fewer units sold than in the short run
A
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All of the following illustrate how government can correct for positive externalities EXCEPT
A) subsidies. B) regulation. C) government financing and production. D) charging effluent fees.
The federal personal income tax is _____ progressive than it was in 1980.
Fill in the blank(s) with the appropriate word(s).
The predictions that the Obama administration used to justify the stimulus plan have been shown to be (according to most economists)
A. wrong; the plan did not work as well as their predictions suggested it would but did have some positive impact. B. wrong; the plan had no positive impact and has been credited with extending the recession of 2007-2009. C. right on the mark. D. wrong; the plan worked much better than their predictions suggested it would.
Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y1. C. P3 and Y1. D. P3 and Y2.