In the 1990s, what reduced the barriers to entry in the local telephone market?
(A) The end of a twenty-year patent on telephone technology.
(B) The deregulation of the local telephone industry.
(C) The rising popularity of cellular phones.
(D) The licensing of new, smaller phone companies.
Ans: (C) The rising popularity of cellular phones.
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According to the graph shown, if the market is in equilibrium, total surplus is:
A. $30.
B. $20.
C. $50.
D. $60.
A positional externality:
A. results in under investment in performance enhancement. B. arises in situations in which rewards depend on relative performance. C. only occurs in sports. D. arises in situations in which rewards depend on absolute performance.
The price elasticity of supply is the:
A. change in the price divided by the change in the quantity supplied. B. change in the quantity supplied divided by the change in price. C. percentage change in the price divided by the percentage change in the quantity supplied. D. percentage change in the quantity supplied divided by the percentage change in price.
Monopolistic competition and perfect competition differ because
A) only monopolistically competitive firms will set MR = MC. B) only perfectly competitive firms will set MR = MC. C) only monopolistic competition allows for entry of other firms in the long run. D) only competitive firms take the price as given.