How do competitive firms try to achieve market power? What is one way they try to accomplish this?
What will be an ideal response?
They try to differentiate their products from their competitors. One way they try to do this is with advertising.
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Which of the following is a way the government can stimulate saving?
A. Decrease interest rates B. Increase taxes C. Offering tax incentives for retirement accounts D. There is nothing the government can do to stimulate saving.
In monopolistic competition, product differentiation causes
a. the firms to earn economic profits in the long run b. a horizontal demand curve for each firm's output c. the firms to operate with excess capacity d. significant barriers to entry e. high concentration ratios
Which of the following decisions is the best example of a business engaging in marginal thinking?
a. choosing whether or not to manufacture an entirely new product line b. deciding to discontinue using newspaper advertising completely c. evaluating whether it would increase profits to add a second shift at their factory d. identifying the opportunity that will be lost when a certain action is taken
Which of the following persons would be considered employed?
A) Jennifer, a teacher who is on a two month maternity leave but will return to work after. B) All of the above persons are considered employed. C) Sam, a 12 year old who helps his mom stock shelves at her gift shop. D) Ron, a recently enrolled full-time college student in hopes of finding a well-paying job.