Which of the following is an application of the Hoteling model of monopolistic competition?
A. Stores of similar types tend to cluster
B. Politicians tend toward positions more extreme than what they actually believe
C. Efficiency requires that stores are spread equidistant from each other in a given space
D. As space increases between firms, each firm produces less
Answer: A
You might also like to view...
Suppose medical research provides evidence that eating bananas provides far greater health benefits than was previously thought. The resulting increase in the demand for bananas
a. increases the marginal product of banana pickers for any given number of banana pickers. b. increases the value of the marginal product of banana pickers for any given number of banana pickers. c. increases the supply of banana pickers. d. All of the above are correct.
Refer to Monopoly Supplier and Manufacturer. After the merger, the leather company will earn surplus of
The following questions refer to the accompanying diagram, which shows a monopoly leather supplier selling leather to a monopoly shoe manufacturer. The leather supplier initially produces QM and charges the shoe manufacturer PM. Then the leather supplier acquires the shoe manufacturer in a vertical merger.
a. Area A + B.
b. Area A + B + C + D + E.
c. Area F + G + H.
d. Area A + B + C + D + E + F + G + H.
Suppose a ski resort decides to sell its lift tickets "below cost" all season long, charging $20 per day as opposed to $30 per day. In principle, how would each ticket sale affect GDP?
A) GDP would fall by $10. B) GDP would rise by $10. C) GDP would rise by $20. D) GDP would rise by $30 after the appropriate cost-price adjustment has been made.
Refer to Figure 7-2. The loss in domestic consumer surplus as a result of the tariff is equal to
A) $5 million. B) $19.875 million. C) $24.875 million. D) $31.125 million.