Product differentiation in monopolistically competitive markets ensures that, for profit-maximizing firms,
a. marginal revenue will equal average total cost.
b. price will exceed marginal cost.
c. marginal cost will exceed average revenue.
d. average variable cost will be declining.
b
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Knowing that the presence of externalities reduces surplus, it implies that:
A. there are mutually beneficial trades waiting to be exploited so private parties have an incentive to solve the externality problem themselves. B. government needs to find them and correct the market. C. there are mutually beneficial trades waiting to be exploited, so government has an incentive to force those parties to solve the problem themselves. D. None of these statements is true.
Which of the following would NOT cause the costs in a monopolistically competitive industry to be higher than those in a perfectly competitive industry?
A. A large number of competitors B. Advertising expenditures C. Marketing costs necessary to differentiate a product D. The ability to control the price of the product so costs can be allowed to rise
Failure to pay back a loan:
a. collude b. collateral c. default d. accelerate
Farm programs such as those of the United States and the European Union:
A. encourage the United States and the European Union to use tariffs and quotas to restrict agricultural imports. B. cause U.S. and EU farmers to produce less than domestic consumers want to purchase. C. increase world market prices for agricultural products. D. raise farm output in developing nations.