Which of the following statements are true?
A. In the long run the monopolistic competitor is as efficient as the perfect competitor.
B. The demand curve of a monopolistic competitor is more horizontal (flatter) than a monopolist's demand curve.
C. In the long run the monopolistic competitor will definitely make a profit.
D. The demand curve of a monopolistic competitor is identical to its marginal revenue curve.
B. The demand curve of a monopolistic competitor is more horizontal (flatter) than a monopolist's demand curve.
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In the presence of negative externalities, ________ is produced and in the presence of positive externalities, ________ is produced.
A. too much of the good; the right amount of the good B. the right amount of the good; too little of the good C. too little of the good; too much of the good D. too much of the good; too little of the good
Between 2015 and 2016, if an economy's exports rise by $8 billion and its imports fall by $8 billion, by how much will GDP change between the two years, all else equal?
A) The increase in exports is offset by the decrease in imports, so there is no change in net exports and no effect on GDP. B) Net exports will decrease GDP by $8 billion. C) Net exports will increase GDP by $8 billion. D) Net exports will increase GDP by $16 billion.
Ceteris Paribus, if current output has fallen below potential ________
A) a positive inflation gap will ensue B) it is likely that the equilibrium real rate has fallen below the policy rate C) a negative unemployment gap will ensue D) it is likely that the equilibrium real rate has risen above the policy rate E) none of the above
On the graph above, if the economy is at point A when the real interest rate falls, the economy's new situation might be indicated by point ________
A) A B) B C) C D) D E) none of the above