Which of the following is an advantage of clustering?
a. New entrants can charge higher prices for products as compared to existing firms
b. New entrants can have lower cost of gathering regional information about trends in the market.
c. New entrants can benefit from favorable terms of trade.
d. New entrants can engage in non-price competition with other firms in the industry.
e. New entrants can charge low prices for their products.
b
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The marginal revenue product can be written as:
a. TR / P. b. w / Q. c. MP × P. d. MRP × P. e. w × L.
Refer to Figure 17-6 The domestic country is China.
Refer to Figure 17-6 With trade, China will
a. import 100 pencil sharpeners.
b. import 250 pencil sharpeners.
c. export 150 pencil sharpeners.
d. export 250 pencil sharpeners.
Why do firms advertise?
a. to stabilize profits b. to eliminate zero profits c. to create a more elastic demand curve d. to create a less elastic demand curve
Economists have long debated whether there is a significant loss of well-being to society in markets that are monopolistically competitive rather than perfectly competitive. Which of the following offers the best reason why some economists believe that
monopolistically competitive markets are less efficient than perfectly competitive markets? A) In contrast to perfectly competitive markets, neither allocative efficiency nor productive efficiency are achieved in monopolistically competitive markets. B) In contrast to perfectly competitive markets, firms in monopolistically competitive markets earn economic profits in long-run equilibrium. C) In contrast to perfectly competitive markets, firms in monopolistically competitive markets do not produce where price equals average total cost in long-run equilibrium. D) In contrast to perfectly competitive markets, firms in monopolistically competitive markets can charge a price greater than average total cost in the short run.