Because the products of firms in a monopolistically competitive market are NOT homogeneous, the
A) demand curve for the industry is the same for the firm.
B) demand curve for the firm's product is horizontal.
C) demand curve for the firm's product is downward sloping.
D) demand curve for the firm's product is upward sloping.
Answer: C
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Contractionary monetary policy refers to the Fed's decreasing the money supply and decreasing interest rates to decrease real GDP
Indicate whether the statement is true or false
All of the following have been proposed as explaining the limited effectiveness of monetary policy during and after the Financial Crisis of 2007-2009 EXCEPT:
A) recessions accompanied by financial crises tend to be severe B) a high level of uncertainty due in part to government policy C) the reluctance of the Fed to implement nonconventional policies D) structural changes as important sectors of the economy were deeply affected by the financial crisis
The deadweight loss associated with a tax on a commodity is generated by
a. the consumers who still choose to consume the commodity but pay a higher price that reflects the tax. b. the consumers who choose to not consume the commodity that is taxed. c. all citizens who are able to use services provided by government. d. the consumers who are unable to avoid paying the tax.
The concentration ratio measures the
A. Number of plants owned by an oligopoly. B. Proportion of total output produced by the largest firms in a specific market. C. Percentage of total profits made by a firm in a specific market. D. Relative size of a firm compared to other industries.