If firms are successful in product differentiation:
a. their demand will become relatively elastic.
b. consumers will believe that the firms are producing more or less identical goods.
c. they can raise their prices without losing all of their customers to rivals.
d. they tend to face a horizontal demand curve.
e. they gradually emerge as price takers.
c
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Which of the following is true of long-run equilibrium price in a monopolistically competitive market?
A) It is equal to average total cost. B) It is less than average total cost. C) It is higher than average total cost. D) It is lower than marginal cost.
In the case of errors-in-variables bias, the precise size and direction of the bias depend on
A) the sample size in general. B) the correlation between the measured variable and the measurement error. C) the size of the regression R2. D) whether the good in question is price elastic.
The law of diminishing marginal utility helps to explain why supply curves are generally upward sloping
Indicate whether the statement is true or false
Which of the following events would cause the supply curve to decrease from S1 to S2?
A. lower expected future prices B. an increase in the price of inputs C. an increase in the number of firms in the market D. a decrease in the price of inputs