Which of the following is true about monopolistic competition but false about perfect competition?
A) There is a large number of independently acting sellers.
B) There are no barriers to entry.
C) Firms can earn an economic profit in the short run.
D) Firms compete on their product's price as well as its quality and marketing.
E) Firms cannot earn an economic profit in the long run.
D
You might also like to view...
Economic models are used to
A) represent the complexities of economic environments. B) explain every detail of an economic theory. C) explore decision making by individuals, firms and other organizations. D) build physical renditions of government construction projects.
Refer to Figure 4-5. The figure above represents the market for pecans. Assume that this is a competitive market. If the price of pecans is $9, what changes in the market would result in an economically efficient output?
A) The price would decrease, the demand would increase, and the supply would decrease. B) The quantity supplied would increase, the quantity demanded would decrease, and the equilibrium price would decrease. C) The price would decrease, the quantity supplied would decrease, and the quantity demanded would increase. D) The price would increase, the quantity demanded would decrease, and the quantity supplied would increase.
Assuming prices and wages are fully flexible, the aggregate supply curve will be:
a. upward sloping, but not vertical. b. vertical. c. horizontal. d. downward sloping.
Consider the labor market for short-order cooks. A labor-augmenting technological change such as a faster food processor will cause
a. both equilibrium wages and equilibrium employment to increase. b. both equilibrium wages and equilibrium employment to decrease. c. equilibrium wages to increase and equilibrium employment to decrease. d. equilibrium wages to decrease and equilibrium employment to increase.