By promoting its brand name heavily, the monopolistically competitive firm
A. signals its intention to leave the industry.
B. earns more profit in the long run.
C. signals its long-term intention to stay in the industry.
D. guarantees a short run profit.
Answer: C
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Explain the process by which a private subsidy corrects an external benefit
What will be an ideal response?
Which of the following would lead a utility-maximizing consumer to search for additional information?
a. an increase in income b. an increase in the marginal cost of information c. improved technology (e.g., Internet search programs) d. a reduction in the dispersion of prices e. an increase in the consumer's wage rate
Which of the following would encourage consumers to economize on health-care expenditures and producers to supply health-care services more efficiently?
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Suppose a new Concordia University graduate will have an annual nominal income of $35,000 for the first year she works. If the annual inflation rate is 10 percent, what salary would she need in the second year to maintain the same real income?
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