Why are the actions of firms interdependent in an oligopoly market but not in a monopolistically competitive market?
Because there are only a few firms in an oligopoly market, their actions are interdependent. There are so many firms in a monopolistically competitive market that each firm it too small for its actions to affect other firms.
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A White House proposal to lower business taxes by increasing tax deductions is an example of
A) progressive taxation. B) contractionary fiscal policy. C) automatic stabilization. D) expansionary fiscal policy.
Among the United States, Finland, and South Africa, income is distributed most equally in ________ and least equally in ________
A) the United States; South Africa B) Finland; South Africa C) Finland; the United States D) South Africa; the United States
If the market price in a competitive market is below the minimum of average variable cost, the firm will shut down
Indicate whether the statement is true or false
Refer to the diagram of the market for product X. Curve St embodies all costs (including externalities), and Dt embodies all benefits (including externalities) associated with the production and consumption of X. Assuming the market equilibrium output is Q1, we can conclude that the existence of external
A. benefits has resulted in an underallocation of resources to X. B. costs has resulted in an underallocation of resources to X. C. benefits has resulted in an overallocation of resources to X. D. costs has resulted in an overallocation of resources to X.