You probably know why firms advertise. But the incentives to advertise vary from market structure to market structure. In which market structure is there a weak, but still existent, reason to advertise?
a. monopoly
b. oligopoly
c. monopolistic competition
d. perfect competition
e. there is no weak incentive—they are always strong
A
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Refer to Scenario 8-1. The value added of CANOES-R-US for each canoe equals
A) $1,200. B) $800. C) $500. D) $400.
A professor in your microeconomics lectures derived a labor demand curve in the lecture
Given some reasonable assumptions, she showed that the demand for labor depends negatively on the real wage. You want to put this hypothesis to the test ("show me") and collect data on employment and real wages for a certain industry. You try to estimate the labor demand curve but find no relationship between the two variables. Is economic theory wrong? Explain. What will be an ideal response?
Samuelson and Solow argued that
a. high unemployment puts upward pressures on wages and prices. b. given the historical evidence, a combination of low inflation and low unemployment was not possible. c. Both A and B are correct. d. None of the above are correct.
If the profit-maximizing markup factor in a three-firm Cournot oligopoly is 2, what is the corresponding market elasticity of demand?
A. ?2/3 B. ?1/2 C. ?2.0 D. ?1.0