There are dozens of pasta producers that sell pasta to hundreds of Italian restaurants nationwide. The restaurant owners buy from the cheapest pasta producer available to them.
A. Yes, meets all assumptions
B. No, no free entry
C. No, not many sellers
D. No, not a homogeneous product
Answer: A. Yes, meets all assumptions
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The price elasticity of supply for a product will be 2 if a
A. 1% decrease in price causes a 0.2% decrease in quantity supplied. B. 2% decrease in price causes a 2% decrease in quantity supplied. C. 2% decrease in price causes a 1% decrease in quantity supplied. D. 1% decrease in price causes a 2% decrease in quantity supplied.
Capital inflows occur if:
A) domestic interest rates are higher than foreign interest rates. B) domestic interest rates are lower than foreign interest rates. C) domestic and foreign interest rates are the same. D) none of the above.
If bond prices rise in the secondary market,
a. the interest rate rises in the secondary market b. the interest rate rises in the primary market c. this has no impact on the primary market d. they fall in the primary market e. they also rise in the primary market
Which of the following is a market in which banks lend reserves to one another?
A) required reserve market B) open market C) discount market D) federal funds market