Firms gain control over price in monopolistic competition by
A. differentiating their products.
B. blocking entry of other firms into the industry.
C. producing a product for which there are no close substitutes.
D. colluding with other firms to set prices.
Answer: A
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At the current level of output, the marginal social benefit from a slice of pizza is less than the marginal social cost of producing a slice of pizza
Resources will be used more efficiently if ________ slices of pizza are produced and ________ other goods are produced. A) fewer; fewer B) more; fewer C) more; more D) fewer; more
If the price of a good is decreased and total revenue received from the sale of this good does not change, then the price elasticity of demand for the good is
A) elastic. B) inelastic. C) unitary. D) None of the above
If people were perfectly rational, they would:
A. only care about real prices. B. only care about nominal prices. C. care about both real and nominal prices. D. not care about prices at all.
Explain why the prices of farm products are subject to abrupt short-term swings.
What will be an ideal response?