Explain why advertising is very important to a monopolistically competitive firm but not to a perfectly competitive firm or a monopolistic firm
A monopolistically competitive firm advertises in order to increase demand for its goods and make demand more inelastic. In contrast, a perfectly competitive firm sells a homogeneous good and can sell all it wants at the market price. As such, it has no reason to advertise at all. While a monopolistic firm could potentially increase demand for its good, advertising is generally not as important as a form of non-price competition because there are no other firms with which to compete in the industry.
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The short-run aggregate supply curve shows the ________.
A. inverse relationship between the price level and real GDP produced B. direct relationship between the price level and real GDP purchased C. inverse relationship between the price level and real GDP purchased D. direct relationship between the price level and real GDP produced
Should the level of pollution be reduced to zero, and if not, then to what level?
What will be an ideal response?
Japanese electronics exports were hurt in 2008 as a result of the recession. How would this decrease in exports have affected Japan's aggregate demand curve?
A) The aggregate demand curve would not have shifted, but there would have been a movement down the aggregate demand curve. B) The aggregate demand curve would have shifted to the right. C) The aggregate demand curve would not have shifted, but there would have been a movement up the aggregate demand curve. D) The aggregate demand curve would have shifted to the left.
Economic discrimination takes place when an employer
A) pays workers the lowest wage possible. B) pays workers compensating wage differentials. C) pays lower wages to workers who are not as productive as other workers. D) pays workers different wages on the basis of some arbitrary characteristics of workers that are irrelevant to the job performed.