Advertising, brand names, packaging, and celebrity endorsements all occur in monopolistically competitive markets because:
a. significant barriers to entry exist in the real world.
b. in the real world, there are very few markets with many firms.
c. that gives the producer some command over the price of their products.
d. product differentiation seldom occurs in the real world.
e. monopolistically competitive firms have an incentive to spend as much money as possible compared to their rivals.
c
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All of the following would stimulate economic growth EXCEPT
A) decreasing taxes on consumption (for instance, decreasing a sales taxes) and increasing income taxes. B) subsidizing basic research. C) decreasing tuition charges at state universities. D) encouraging international trade.
When there are economies of scale,
A) MC > AC, so cost-output elasticity is greater than AC. B) MC < AC, so cost-output elasticity is less than AC. C) MC < AC, so cost-output elasticity is greater than 1. D) MC < AC, so cost-output elasticity is less than 1. E) long-run marginal cost is declining.
To address the shortage of physicians on the horizon, it will be necessary to
a. build more medical schools. b. provide more grants and scholarships for medical education. c. allow the admission of more foreign-educated physicians. d. all of these are true.
Proponents of economic growth claim that rising living standards can lead to environmental improvements as people can afford to care more about the environment.
a. true b. false