Which of the following is always associated with monopolistic competition?
a. Identical products
b. Economic profits in the short run
c. MR lies above the demand curve
d. Demand curves become more inelastic as new entry occurs
e. Product differentiation
e
You might also like to view...
A constant-elasticity demand function can be obtained by:
A) taking the logarithm of the dependent variable only. B) taking the logarithm of the independent variable(s) only. C) taking the logarithm of the dependent and independent variable(s). D) taking the reciprocal of the dependent variable(s).
A simple linear demand function may be stated as Q = a - bP + cI where Q is quantity demanded, P is the product price, and I is consumer income. To compute an appropriate value for c, we can use observed values for Q and I and then set the estimated income elasticity of demand equal to:
A. c(Q/I). B. -b(I/Q). C. Q/(cI). D. c(I/Q).
Figure 10-17
Suppose an economy is currently operating at output Y1 associated with AD1 and SRAS1, shown in . Initially, the output of this economy is
a.
above its potential, and the rate of unemployment is greater than the natural rate.
b.
below its potential, and the rate of unemployment is greater than the natural rate.
c.
above its potential, and the rate of unemployment is less than the natural rate.
d.
below its potential, and the rate of unemployment is less than the natural rate.
If each company that made up the Dow Jones Industrial Average increased the number of their shares outstanding by 10%, but the share prices did not change, the value of the index would:
A. decrease since there are more shares outstanding. B. increase by 10%. C. not change. D. increase, but by less than 10%.