The demand curve of a monopolistically competitive firm
A) is downward-sloping because it must cut its price to sell more.
B) is horizontal because the firm must cut its price to sell more.
C) is perfectly elastic.
D) is downward-sloping because it sells an identical product.
A
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The cross price elasticity of demand for a good x is the percentage change in the quantity demanded of good x in response to a given percentage change in
A) income. B) the price of good x. C) the price of good y. D) the quantity demanded of good y.
What does the slope of the production possibilities curve represent? Explain
What will be an ideal response?
Marginal utility:
A) is equal to total utility divided by the number of units consumed. B) is equal to total utility if the demand curve is linear. C) increases as more of a product is consumed. D) diminishes as more of a product is consumed.
Given Keynesian assumptions about the shape of the aggregate supply curve and an economy suffering a recession, which of the following is most likely to occur if the Fed pursues expansionary monetary policy?
A. The equilibrium price level and output will both increase until full employment is reached. B. The equilibrium price level and output will both decrease. C. The equilibrium price level will increase but output will stay the same. D. The equilibrium output will increase but the price level will stay the same until full employment is reached.