Since advertising increases a firm's average total cost, consumers ultimately pay for the cost of advertising in the form of a higher price in the long run. It is not possible for a firm to end up with a lower profit-maximizing price as the result of advertising
a. True
b. False
B
Economics
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Why can't a monopolistic competitor earn economic profits in the long run?
What will be an ideal response?
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If the price of an inferior good increases, the substitution effect encourages the consumer to purchase less of it while the income effect encourages him to purchase more of it
a. True b. False
Economics
In response to Economist Jeffrey Sachs' big push theory:
A. NATO funded 13 Millennium Villages. B. the UN developed 8 Millennium Development Goals. C. the UN declared a moratorium on all foreign aid. D. the U.S. funded half of NATO's village project.
Economics
If a new home can be constructed for $150,000, what is the opportunity cost of federal defense spending, measured in terms of private housing? (Assume a defense budget of $700 billion.)
Economics