In a monopolistic competition scenario, as long as a firm is earning positive economic profits:
a. new competitors will be discouraged from entering the market.
b. new competitors will continue to enter the market.
c. a state of perfect competition will continue, balanced between new and existing competitors.
d. the firm’s demand and marginal revenue curves will increase because of new competitors.
b. new competitors will continue to enter the market.
In a monopolistic competition scenario, as long as the firm is earning positive economic profits, new competitors will continue to enter the market, reducing the original firm’s demand and marginal revenue curves.
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In the case of exact identification
A) you can use the J-statistic in a test of overidentifying restrictions. B) you cannot use TSLS for estimation purposes. C) you must rely on your personal knowledge of the empirical problem at hand to assess whether the instruments are exogenous. D) OLS and TSLS yield the same estimate.
Technological change has always been the most critical factor in raising living standards, even going as far back as the development of the
A. steam engine. B. iPod. C. fluorescent light. D. bicycle.
If the bank advertises 6 percent annual interest rate on a one-year certificate of deposit and you anticipate the rate of inflation to rise to 3 percent during the year, then the real rate of interest on the certificate of deposit is
A) 9 percent. B) 6 percent. C) 3 percent. D) 2 percent.
A perfectly competitive industry is in long-run equilibrium. If demand for the product decreases, we can expect the price of the good to:
A. rise at first and then fall. B. fall at first and then rise. C. rise and remain at the higher price. D. fall and remain at the lower price.