Because of product differentiation, a monopolistically competitive firm:
a. possesses some degree of market power
b. is very similar to a perfectly competitive firm.
c. faces a perfectly elastic demand curve.
d. is unaffected by the elasticity of demand.
a
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Answer the following statements true (T) or false (F)
1. If the marginal propensity to consume were four-fifths, the size of the multiplier would be 5. 2. The multiplier is the reciprocal of the marginal propensity to consume. 3. The multiplier is the relationship between the initial change in aggregate expenditure and the resulting change in income. 4. The higher the propensity to save, the larger the size of the multiplier. 5. If planned investment increases by $20 billion, other things remaining the same, planned saving eventually will increase by $20 billion, regardless of the size of the multiplier.
What is the natural rate of unemployment, and how does it relate to the concept of potential (or full-employment) GDP?
When demand is elastic, if we were to raise price, total revenue would ______; when demand is inelastic, if we were to raise price, total revenue would _______.
Fill in the blank(s) with the appropriate word(s).
Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. higher; potential D. lower; higher