In a monopolistically competitive market, having a large number of firms in the market means that
A) no firm attempts to take into account the reaction of rival firms.
B) individual firms will have a large portion of the market giving them monopoly power.
C) firms will get together and collude because this will be the only way to earn monopoly profits.
D) firms will cooperate with each other to drive competitors out of the market.
A
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A) an increase in the real interest rate. B) technological improvements. C) tax cuts. D) decreases in the expected profit.
IBFs are designed to compete with
A) Eurobonds. B) off-balance-sheet activities. C) shell branches. D) letters of credit.
If the price elasticity of demand for a good is less than one in absolute value, economists would characterize consumers of this good
A) as not very sensitive to price. B) as not very sensitive to the quantity they demand. C) as very sensitive to price. D) as elastic.
If a monopolist is producing the output level at which price equals average total cost in the short run, then the firm is earning a normal profit
a. True b. False Indicate whether the statement is true or false