Which of the following does not characterize a competitive market?
A.) Many firms
B.) Advertising by individual firms
C.) Low barriers to entry
D.) Zero economic profit in the long run
B.) Advertising by individual firms
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A shock that increases the costs of production is a
A) positive aggregate demand shock. B) positive aggregate supply shock. C) negative aggregate demand shock. D) negative aggregate supply shock.
In the short-run macro model, firms that sell more than they produce will respond by
a. reducing output b. increasing output c. reducing prices d. raising prices e. not changing production because the market will adjust on its own
Under the assumptions of the Fisher effect and monetary neutrality, if the money supply growth rate rises, then
a. both the nominal and the real interest rate rise. b. neither the nominal nor the real interest rate rise. c. the nominal interest rate rises, but the real interest rate does not. d. the real interest rate rises, but the nominal interest rate does not.
When the minimum wage is set below the market equilibrium wage, it does not affect the market.
Answer the following statement true (T) or false (F)