Which statement is correct regarding allocative efficiency in monopolistic competition?
a. When new competitors enter a monopolistically competitive industry, the demand curve for each firm will shift to the left.
b. When new competitors enter a monopolistically competitive industry, the demand curve for each firm will shift to the right.
c. When new competitors exit a monopolistically competitive industry, the demand curve for each firm will shift to the left.
d. When new competitors enter a monopolistically competitive industry, the demand curve for each firm will not be affected.
a. When new competitors enter a monopolistically competitive industry, the demand curve for each firm will shift to the left.
When entry occurs in a monopolistically competitive industry, the perceived demand curve for each firm will shift to the left, because a smaller quantity will be demanded at any given price.
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A solution to the budget-gaming problem is
a. Introduce milestones or kinks in the compensation scheme b. Use a target based pay function with each target scoring greater return c. Do not base compensation on meeting a particular budget goal d. All of the above
It is not true in the long run of monopolies that
A. other firms seeking positive economic profit enter the market. B. they earn positive economic profit. C. they sell their output at a price greater than marginal cost. D. they benefit from barriers to entry.
A reduction in demand for retail salesperson post Christmas and New Year can be categorized as:
a. frictional unemployment. b. structural unemployment. c. seasonal unemployment. d. cyclical unemployment.
If the number of unemployed is greater than the number of employed, the unemployment rate is
A. over 100%. B. more than 50%. C. less than 50%. D. None of the choices are correct.