Because monopolistically competitive firms produce differentiated products, each firm
a. faces a demand curve that is horizontal.
b. faces a demand curve that is vertical.
c. has no control over product price.
d. has some control over product price.
d
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Paying rent to landlords was opposed by both _____________ and ______________.
Fill in the blank(s) with the appropriate word(s).
If the price elasticity of supply is equal to zero and the price was to rise, the quantity supplied would:
A. decrease slightly. B. fall to zero. C. not change. D. increase.
The graph above shows a small country that can import at the world price of Pw. Suppose that the government imposes a tariff of $T per unit (and suppose that this does not raise the domestic price so much that there will be no trade. Use the graph above to illustrate the effects of the tariff. Show the new areas of consumer surplus, producer surplus, and government revenue, and the deadweight
losses due to the tariff. Who wins and who loses from the tariff? What will be an ideal response?
In a Bertrand model, market power is a function of
A) marginal cost. B) the number of firms. C) price elasticity of supply. D) product differentiation.