What are the three main characteristics of monopolistic competition?
The three main characteristics of monopolistic competition are as follows: the existence of many firms, freedom of firms to enter and leave the industry, and the presence of products that are close substitutes of each other.
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The Ricardo-Barro effect holds that
A) equal increases in taxes and government expenditures have no effect on equilibrium real GDP. B) government budget deficits have no effect on the real interest rate. C) a government budget deficit crowds out private investment. D) a government budget deficit induces a decrease in saving that magnifies the crowding out effect.
Refer to Scenario 25-2. As a result of Kristy's deposit, Bank A's required reserves increase by
A) $2,000. B) $8,000. C) $10,000. D) $50,000.
When a variable is determined by a factor outside of the function or model being evaluated, it is said to be
A) endogenous. B) exogenous. C) unexplained. D) statistically insignificant.
If the price of a firm's product is $12 and the firm faces a constant marginal cost of $5 that is equal to its (constant) average total cost, the profit from selling a unit of the firm's product from its inventory is equal to ________.
A) $5 B) $7 C) $8 D) $15