In monopolistic competition, the presence of a large number of firms making a differentiated product means that
A) each firm can set the price of its particular product.
B) each firm must charge the same price.
C) the price is established by collusive behavior.
D) each firm must produce the same quantity.
E) firms cannot compete with each other on the basis of price.
A
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Which of the following is true regarding pollution charges?
i. They force a polluter to pay a price for its pollution. ii. They are based on the marginal external cost of pollution. iii. The fee that produces the efficient amount of pollution is easily determined. A) i only B) i and ii C) ii and iii D) i, ii, and iii E) i and iii
Total expenditure equals total income
A) if firms do not save for future investment. B) if firms earn zero profit. C) because firms pay out everything they receive as income to the factors of production. D) only if net taxes equals government expenditures on goods and services. E) only if firms sell all the goods they produce in a given time period.
What did Harvard economist Edward Chamberlain say about the observation that a monopolistically competitive firm's average cost of production exceeds its minimum average total cost?
A) Chamberlain argued that these higher costs represent the wastefulness of this market structure. B) Chamberlain argued that this belief is incorrect. In his view, monopolistically competitive firms do not produce at a cost above their minimum average total costs. C) According to Chamberlain, this cost difference represents the value consumers place on variety and having more choice. D) In Chamberlain's view, this is evidence that monopolistic competition uses society's resources inefficiently and in a fashion that merits government intervention.
According to the text, to effectively control most American corporations requires
a. a person to own nearly all of the voting stock b. a person to own at least 51 percent of the voting stock c. a person to own at least 75 percent of the voting stock d. as little as 10 percent of the voting stock e. a person to own all of the corporate bonds