In theory, in the long run, monopolistically competitive firms earns zero profits. However, in reality there are some ways by which a firm can avoid losing profits. Which of the following is one such way?
A) gradually increase the mark-up on the goods produced
B) lower the price of its products to expand its market share
C) identify new markets and develop products precisely for those markets
D) find a market niche and keep it as narrow as possible so as to prevent other producers from entering this market segment
Answer: C
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In order to make a rational choice, people must
A) decide quickly without wasting time. B) be able to afford the choice decided upon. C) determine what is in the social interest. D) only know what they want. E) compare marginal costs and marginal benefits.
The trade between countries is recorded in accounts called the balance of
A) U.S. official trade account. B) payments accounts. C) export and import accounts. D) currency accounts. E) international trade accounts.
For demand to exist, there must be
a. a desire and an ability to buy. b. a supply of the product in the market. c. a price that is low enough to permit all consumers to afford the product. d. All of these.
In the Keynesian cross diagram, a decrease in investment spending because companies become more pessimistic about investment profitability causes the aggregate demand function to shift down, the equilibrium level of aggregate output to ________, and
the IS curve to shift to the ________, everything else held constant. A) rise; left B) rise; right C) fall; left D) fall; right