How is monopolistic competition like perfect competition? How is it like monopoly?
What will be an ideal response?
Monopolistic competition is like perfect competition in that there are many buyers and sellers and it is easy for firms to enter and exit the industry. But it is like monopoly in that firms face downward sloping demand curves. The demand curves slope down because the product is not homogeneous, so the product of one firm is not a perfect substitute for the product of another firm.
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According to the classical model, an increase in government purchases will
a. lead to a change in the interest rate that encourages consumers to spend more b. lead to a change in the interest rate that encourages private businesses to invest more c. discourage private spending by increasing the price level d. be partially offset by a decline in consumption and investment spending e. leave total spending and output unchanged
Pair-wise majority voting ________ the criteria of an ideal voting system.
A. meets all of B. fails to meet all of C. fails to meet one of D. fails to meet two of
Assume you pay a premium of $0.50/bu for a put option with a strike price of $4.00/bu and that the current futures price is $4.25/bu. Then, the option is:
A. In-the-money B. At-the-money C. Out-of-the-money D. None of the above
The maximum welfare benefit levels in most states
A. by law are 1.5 times the poverty income threshold. B. by law must equal the poverty income threshold. C. are significantly above the poverty income threshold. D. are significantly below the poverty income threshold.