A monopolistically competitive firm
A. must raise price to sell more output.
B. must lower price to sell more output.
C. sells a fixed amount of output regardless of price.
D. can sell an infinite amount of output at the market-determined price.
Answer: B
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M&M and Dove are both considering issuing themed holiday candy. The profits for each strategy, regular candy or holiday candy, are summarized in the payoff matrix above
The Nash Equilibrium in this game is that Dove produces ________ and M&M produces ________. A) holiday candy; regular candy B) regular candy; holiday candy C) regular candy; regular candy D) holiday candy; holiday candy
When a firm is a price-taking firm,
A. raising the price of the product above the market-determined price will cause sales to fall nearly to zero. B. many other firms produce a product that is identical to the output produced by the rest of the firms in the industry. C. the price of the product it sells is determined by the intersection of the market demand and supply curves for the product. D. all of the above
If external benefits occur when a good is consumed, then the government should:
a) Enforce antitrust laws against producers of the good. b) Make transfer payments to those who incur the externalities. c) Tax the producers of the good. d) Subsidize the consumption or production of the good.
An increase in aggregate demand would be most likely caused by a decrease in:
A. the tax rates on household income. B. the wealth of consumers. C. consumer confidence. D. expected future prices.