The force that leads to zero economic profits for monopolistically competitive firms in the long run is
a. excess capacity.
b. price wars among firms.
c. entry by new firms.
d. excessive advertising.
c
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In the above figure, a movement from point B to point C represents
A) an increase in the quantity of money demanded. B) a decrease in the quantity of money demanded. C) a decrease in the demand for money that might be the result of an increase in real GDP. D) an increase in the demand for money that might be the result of a fall in the price level. E) an increase in the demand for money that might be the result of an increase in real GDP.
Antitrust law is law that
A) does not allow individuals to open trust savings accounts. B) prohibits competition in certain industries. C) prohibits certain kinds of market behavior by firms. D) allows firms under special circumstances to be a monopoly.
Suppose the value of income elasticity of demand for a private college education is equal to 1.5 . This means that:
a. every $1 increase in income provides an incentive for a $1.50 increase in expenditures on private college education. b. every $1.50 increase in income provides an incentive for a $1 increase in expenditures on private college education. c. a 10 percent increase in income causes a 15 percent increase in the quantity of private college education purchased. d. a 15 percent increase in income causes a 10 percent increase in the quantity of private college education purchased. e. a 10 percent decrease in private college tuition will have a large enough income effect to increase spending on private college education by 15 percent.
In a small economy in 2011, aggregate expenditure was $800 million while GDP that year was $850 million. the following can explain the difference between aggregate expenditure and GDP that year?
What will be an ideal response?