Which of the following supports the contention that monopolistic competitors have a strong incentive to engage in R&D?
A. Entry to monopolistic competitive industries is relatively easy and thus profit from
innovation is quickly competed away.
B. Most monopolistic competitive industries are decreasing-cost industries.
C. The desire to differentiate products from competitors may motivate monopolistic
competitors to engage in R&D.
D. Monopolistic competitors have large retained earnings that are available to finance R&D.
Answer: C
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One way to deal with the efficiency problem of monopolies is to tax the profits of monopolists.
Answer the following statement true (T) or false (F)
Refer to the above table. If the price of the good produced is $7, the marginal revenue product of the 11th worker is
A) $700 B) $4200 C) $630 D) $3500
This table shows the demand and supply schedule of a good.
According to the table shown, at a price of $1.00:
A. a shortage will exist.
B. a surplus will exist.
C. more is being supplied than demanded.
D. the market is in equilibrium.
The resource market comprises of households and firms where the firms sell their resources to the households
a. True b. False Indicate whether the statement is true or false