As firms increase in size, they tend to experience a:
A. loss of opportunity cost.
B. decrease in the need for managers.
C. decrease in transaction costs.
D. None of the answers are correct.
Answer: D
You might also like to view...
The government requires the steel industry to adopt new eco-friendly machines, which cannot be used in other industries. If the machines are very expensive and the capital market does not work efficiently, then
A) entrants are encouraged to enter the market and adopt the new machines. B) firms can easily leave the steel industry without loss. C) entrants are discouraged by the new requirements. D) None of the above.
Suppose the market demand for milk is Qd = 150 - 5P. Additionally, suppose that a dairy's variable costs are VC = 2Q2 (where Q is the number of gallons of milk produced each day), its marginal cost is MC = 4Q and there is an avoidable fixed cost of $50 per day. In the long run there is free entry into the market. Suppose the demand for milk doubles. How many new firms enter the market in the long run due to the increased demand?
A. 10 B. 20 C. 100 D. 2
Nonprice competition in monopolistically competitive markets results in
A. consumers buying the product with the lowest price in a differentiated market. B. less advertising and product differentiation than in markets without nonprice competition. C. rivalry among competing firms based on the characteristics that differentiate their products. D. price equaling the minimum average total cost in long run equilibrium.
Which economic perspective would be most closely associated with the view that discretionary monetary policy is an effective force for stabilizing the economy?
A. Monetarism B. Mainstream economics C. Rational expectations D. New classical economics