When firms exit a monopolistically competitive market:
a. product variety diminishes
b. prices fall.
c. profits decrease (losses increase).
d. the demand curves of established firms shift to the right.
d
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"The distribution of income should be determined by the government" is an example of a positive economic statement
Indicate whether the statement is true or false
For an inferior good, the income and substitution effects
A) work together. B) work against each other. C) can work together or in opposition to each other depending upon their relative magnitudes. D) always exactly cancel each other.
A common feature of regulated industries is cross-subsidization, which is a situation when one group of customers pays prices above costs while another group of customers pays prices below costs. The one group is subsidizing the other group
Is this practice more consistent with the capture hypothesis or the share-the-gains, share-the-pains theory? Explain.
If the MRP is less than the wage, the firm should hire more labor
a. True b. False Indicate whether the statement is true or false