Everything else equal, the more rivals a firm has, the
a. less kinked is its demand curve.
b. closer is its equilibrium price to its average variable costs.
c. more differentiated is its product from rivals' products.
d. more elastic is its demand curve.
d
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An unregulated monopoly finds that its marginal cost exceeds its marginal revenue. In order to increase its profit, the firm will
A) raise its price and decrease its output. B) lower its price and increase its output. C) raise its price and increase its output. D) continue to produce this level of output because any change will lower its profit.
An increase in spending that results from expansionary ________ policy causes the interest rate to ________, everything else held constant
A) fiscal; rise B) fiscal; fall C) incomes; rise D) incomes; fall
Rational expectations theory rejects the concept that only unanticipated or surprise policies can influence inflation
a. True b. False Indicate whether the statement is true or false
When a household spends over 70% of its monthly income on a good, demand will be
A. elastic. B. unit-elastic. C. inelastic. D. elastic, unit-elastic or inelastic depending upon supply.