In markets characterized by monopolistic competition,
A. entry into the market is restricted so that profit may be positive in the long run.
B. a small number of relatively large firms sell a standardized product.
C. a small number of relatively small firms sell a differentiated product.
D. entry into the market is relatively easy so that profit in the long run is zero.
Answer: D
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Assume there is no way to prevent someone from using an interstate highway, regardless of whether or not he or she helps pay for it. This characteristic is called
A. nonexcludability. B. nonrivalry. C. nontaxability. D. nondiscrimination.
When the marginal cost of a price-taking firm is less than the market price of its product, the firm should:
a. expand output (provided that price is not less than average variable cost). b. reduce output (provided that price is not less than average variable cost). c. maintain output (provided that price is not less than average variable cost). d. charge more than the market price.
A consumer possesses five pounds of bananas and values their total utility at $2.14 . If one additional pound is acquired and marginal utility is 11 cents, total utility will
a. rise to $2.25. b. fall to $2.03. c. stay the same. d. fall to $2.11.
The value of a country's currency declines when it implements policies that restrict trade. The primary factor affecting the change in value of the currency in this situation is
A. cultural differences. B. civil unrest. C. demographics. D. isolationism.