The fact that monopolistically competitive firms charge a price that exceeds marginal cost is responsible for the
a. business-stealing externality that is observed in monopolistically competitive markets.
b. product-variety externality that is observed in monopolistically competitive markets.
c. inefficiencies of the long-term losses earned by monopolistically competitive firms.
d. persistence of positive profits into the long run for monopolistically competitive firms.
a
You might also like to view...
We often observe "pseudo-intra-industry trade" between the United States and Mexico. Actually, such trade is consistent with
A) comparative advantage associated with Heckscher-Ohlin model. B) oligopolistic markets. C) optimal tariff issues. D) the Ricardian model of trade. E) the specific factors model of trade.
Which of the following is true of the labor force participation rate? a. When workers become unemployed, the labor force participation rate declines
b. When the unemployed become discouraged workers, the labor force participation rate declines. c. When workers do not fully use their skills, the labor force participation rate decreases. d. Since the 1950s, the labor force participation rate of women has decreased in the United States. e. The trend toward earlier retirement has increased the labor force participation rate in the United States.
Which of the following factors influence the position of the long-run aggregate supply curve?
A. the supply of money B. government spending C. taxes D. the level of full-employment output
Refer to the graph shown. At point D demand is:
A. elastic. B. perfectly elastic. C. unit elastic. D. inelastic.