Why is competition important? Do business firms operating in competitive markets have a strong incentive to serve the interests of consumers? Do business owners have to care about the interests of others if they are going to provide them with helpful products and services?
Competition is important because it provides businesses with a strong incentive to serve consumers. Businesses that fail to provide consumers with desired goods at economical prices will lose out to rivals who are doing a better job of satisfying consumers. In essence, businesses get ahead by providing consumers with what they want at economical prices. Thus, even if they are motivated primarily by profit rather than a desire to be helpful, in competitive markets, businesses would still have a strong incentive to provide consumers with desired goods and services at economical prices.
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An increase in aggregate expenditure has what result on equilibrium GDP?
A) Equilibrium GDP falls. B) Equilibrium GDP rises. C) Equilibrium GDP is not affected by an increase in aggregate expenditure. D) Equilibrium GDP may rise or fall depending on the size of the increase in aggregate expenditure relative to the initial level of GDP.
If a competitive firm faces a competitive labor market, it will hire labor until
A) w = p. B) w = MPL. C) w = MPL ? p. D) MPL = 0.
Approximately how often does the Federal Open Market Committee meet?
Alberto purchases ten cups of coffee a week. The amount of money that he holds to purchase ten cups of coffee is the
A. transactions demand for money. B. asset demand for money. C. money balance demand for money. D. precautionary demand for money.