A profit?maximizing firm in a monopolistically competitive market structure behaves much like a ________ in the short run.
A. dominant firm
B. monopolistic firm
C. Cournot duopolist
D. perfectly competitive firm
Answer: B
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Assume that as the wage rate rises a worker's substitution effect for leisure is larger than the income effect. We can conclude that in this region, the worker's
A) labor supply curve will be backward bending. B) labor supply curve will have the usual upward slope. C) labor supply curve will be completely inelastic. D) supply curve will be horizontal.
Which of the following categories accounted for the lowest percent of the total federal government expenditures in recent years?
a. Income security b. Interest on the national debt c. National defense d. Education and health
Comparative advantage is defined as
A) producing all goods at lower opportunity costs than other countries can. B) producing more output of all goods than anyone else can. C) producing one good at a lower opportunity cost than another country can. D) the ability to produce more output from given inputs than anyone else can.
Answer the following questions true (T) or false (F)
1. Natural resource cartels such as OPEC are inherently unstable because their members operate with excess capacity and have an incentive to cheat on their output quotas. 2. Because many business situations are repeated games, firms may be able to avoid the prisoner's dilemma and implicitly collude to keep prices high. 3. Firms are more likely to find themselves in a prisoner's dilemma in sequential games as opposed to simultaneous games.