A major characteristic of monopolistic competition is:
A. a relatively large number of firms selling the product.
B. relatively easy entry into an industry but a relatively difficult exit from the industry.
C. a high degree of collusion among firms.
D. mutual interdependence.
Answer: A
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Price floors are typically accompanied by a standard series of symptoms. What are they?
Last year your job at the university cafeteria paid you $9 an hour and the price of a music download was $1.00 . This year your cafeteria job pays $9.90 per hour and download costs $1.10 . You are clearly
a. worse off because of inflation. b. worse off because the download is now relatively more expensive. c. better off because your wage rate went up. d. better off because the download now costs less work.
The long-run aggregate supply curve is:
A. a horizontal line. B. an upward-sloping line. C. a vertical line. D. a downward-sloping line.
A monopoly produces X at a marginal cost of $10 per unit and charges a price of $20 per unit. Determine the elasticity of demand at the profit-maximizing price of $20.
A. ?2 B. ?0.5 C. ?0.333 D. There is insufficient information to determine the monopoly's price elasticity of demand.