The demand curve in monopolistic competition slopes downward because of:
A. strong barriers to entry.
B. product differentiation.
C. the small number of firms.
D. government regulation.
Answer: B
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
The Nash equilibrium of this game is for Jet Cruises to ________ and Easy Sail to ________.
Jet Cruises wants to prevent Easy Sail from entering the sailboat market. The above game tree illustrates the different strategies and corresponding payoffs for the two firms. Both Jet Cruises and Easy Sail have the same strategies of advertising (Ad) or not advertising (No Ad). The payoffs represent net profit in millions.
A) Ad; Ad
B) No Ad; Ad
C) Ad; No Ad
D) No Ad; No Ad
If income increases, then the:
A. budget line shifts to the right. B. budget line rotates clockwise. C. opportunity set contracts. D. budget line rotates counterclockwise.
An increase in U.S. exports because of increasing foreign incomes represents ________ in the United States.
What will be an ideal response?