Firms in monopolistically competitive markets spend significant sums on product differentiation because:
a. it enables them to earn positive profits in the short run.
b. it increases the elasticity of demand for a firm's product.
c. it reduces the number of competitors.
d. it causes the firm's supply curve to become horizontal so the firm can expand output indefinitely.
e. it causes the firm's demand curve to become horizontal so that it can charge a fixed price for its product.
a
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What is the overall longrun impact of labor immigration on returns to factors of production?
a. Returns to labor will increase and returns to capital will decrease. b. Returns to labor and returns to capital will both increase. c. Both relative and absolute returns to factors of production will not change. d. Both relative and absolute returns to factors of production will increase.
Alissa is studying for her principles of economics exam. She tells her study partner that "Only a very small number of people ever get to become astronauts and go into space. Therefore space exploration is not a public good." Do you agree? Explain.
What will be an ideal response?
As you consume more of a particular commodity, your total level of utility derived from that consumption will
A) increase at an increasing rate. B) increase at a decreasing rate. C) increase at a constant rate. D) remain constant.
The most important determinant of consumption and saving is the:
A. level of bank credit. B. level of income. C. interest rate. D. price level.