In a monopolistically competitive market with Dixit-Stiglitz preferences, the number of firms in the differentiated product market falls as goods in that market become less substitutable.
Answer the following statement true (T) or false (F)
False
Rationale: The number of firms falls as goods become more substitutable.
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The demand for money curve is drawn
A) holding several things constant, including the price level and interest rates. B) with interest rates on the vertical axis and the curve sloping down since lower interest rates mean the "price" of holding money has fallen. C) holding several things constant, including GDP and interest rates. D) with interest rates on the horizontal axis, and the curve sloping up since the "price" of holding money varies directly with the interest rate.
Fraudulent practices and other abuses of private pension funds led Congress to enact the
A) FDIC Act. B) Federal Reserve Act. C) FHLBS. D) Employee Retirement Income Security Act.
Which is an important aspect of the perfectly competitive market that leads to long run equilibrium?
A) perfect information B) freedom of entry and exit C) price taking behavior D) homogeneous products
If business taxes are reduced and the real interest rate increases:
A. consumption and saving will necessarily increase. B. the level of investment spending might either increase or decrease. C. the level of investment spending will necessarily increase. D. the level of investment spending will necessarily decrease.