A monopolistically competitive firm that is profitable in the short run will face competition that will eventually eliminate the firm's profits in the long run. But the firm can stave off competition and continue to earn economic profits if
A) it can successfully sue its competitors for copyright infringement.
B) it can move to another country where there is less competition.
C) it can lobby the government to establish a price floor for its product.
D) it can find new ways to differentiate its product.
Answer: D
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The relationship between tax rates and tax revenues is shown on the
A) IRS curve. B) production possibilities frontier. C) Laffer curve. D) Discretionary Spending curve.
Fluctuations in the demand for reserves cause the Fed to lose control over a monetary aggregate if the Fed targets
A) a monetary aggregate. B) the monetary base. C) an interest rate. D) nominal GDP.
The primary source of revenue for the Federal Reserve is
a. the interest earned on the bonds held by the Fed. b. its annual appropriation from Congress. c. the interest earned on discount loans to banks. d. the dividends earned on the stocks held by the Fed.
Suppose that for George the marginal benefit per dollar spent on tuna is less than the marginal benefit per dollar spent on ham. The consumer can always increase his utility by buying:
A. more tuna and less ham. B. less tuna and more ham. C. more of both goods. D. The consumer is already maximizing utility.