A successful local entrepreneur opens up the only Chevrolet dealership in a medium sized Texas town. Why does this not necessarily constitute a monopoly position?
What will be an ideal response?
First of all it may be that even though there are no Chevrolet dealerships in town that doesn't imply that there aren't any other competitors like Ford, Chrysler, Toyota or Honda. And even if that wasn't' the case buyers may find it useful to car shop in nearby towns.
You might also like to view...
If short-run equilibrium output equals 20,000 and full employment equals 25,000, then this economy has a(n)
A. employment gap. B. inflationary gap. C. demand gap. D. recessionary gap.
Depletable resource prices change over time depending on
A. how the technology of resource extraction changes. B. the prices of publicly traded stock. C. the number of countries that have nationalized production. D. the prices of substitutable renewable resources.
The income approach to measuring GDP
A. adds the income received by all factors of production. B. excludes profits since profits are a cost of production. C. adds the dollar value of final goods and services. D. excludes durable consumer goods since they last more than a year.
In the efficiency wage model, a decrease in productivity would
A. decrease output but have no effect on the real wage. B. have no effect on either output or the real wage. C. increase the real wage but have no effect on output. D. decrease output but increase the real wage.