The monopolistic competitive industry in Figure 8.5 will tend to:
A. contract.
B. remain the same size.
C. expand.
D. go out of business.
Answer: B
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Refer to the figure above. The producer surplus before the imposition of the tax is given by the area ________
A) GHF B) GAE C) JBHF D) JBC
Assume the four-firm concentration ratio in industry X is 75 percent and that the firms in the industry produce a differentiated product. Industry X most likely would be characterized as:
A) perfectly competitive. B) a monopoly. C) monopolistically competitive. D) an oligopoly.
An equilibrium is an outcome in which
a. all individuals are simultaneously optimizing. b. constraints are no longer binding. c. social gain is as large as possible. d. the wants of all agents are fully satisfied.
Do monetarists favor rules or discretionary policy? Why?
What will be an ideal response?