One of the implications of the kinked demand curve model is that even if a firm's costs change by a measurable amount, market price is unlikely to change. This helps explain the price rigidity observed in many oligopolistic markets
Indicate whether the statement is true or false
TRUE
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Along a short-run Phillips curve when the inflation rate rises,
A) the real wage rate falls and more labor is hired. B) the expected inflation rate falls. C) the expected inflation rate rises. D) the money wage rate falls because the labor market becomes less tight. E) potential GDP decreases.
If in monopolistic competition in the short run, firms make ________ profits, then in the long run, new firms will enter the market. The ________ each individual firm's product will ________
In the new long-run equilibrium firms will make ________ profit. A) economic; demand for; decrease; zero economic B) normal; demand for; increase; zero economic C) economic; supply of; decrease; an economic D) economic; supply of; increase; zero economic
Demand is said to be elastic when percentage changes in quantity demanded are
A. less than the percentage changes in price. B. higher than the percentage changes in price. C. equal to the percentage changes in price. D. zero when price changes.
Featherbedding refers to the practice of: a. disallowing members from joining labor unions
b. hiring lesser number of laborers than what is required. c. terminating employment without notice. d. hiring more laborers than what is necessary.