Once a monopolistically competitive firm innovates, it is likely that:
A. it will enjoy long-run profits.
B. other firms will rush to create similar, highly substitutable goods.
C. it will need government protection to earn enough to cover its R & D costs.
D. None of these is likely to happen.
B. other firms will rush to create similar, highly substitutable goods.
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An economist claims that any point not on a production possibilities frontier cannot be best. What is his reasoning to support this?
A. A point inside the frontier implies that society is not facing up to the problem of scarcity. B. A point inside the frontier limits growth, and growth is always a goal worth pursuing. C. A point inside the frontier represents inflation, and inflation is a dangerous situation. D. A point inside the frontier results in fewer goods, and more is always better. E. A point inside the frontier is inefficient and represents wasted resources.
Which of the following will increase the demand for loanable funds?
a. a newly established consumption tax b. a decrease in the real interest rate c. an increase in the real interest rate d. creation of an investment tax credit for businesses
A demand curve for flowers would show the
a. number of flowers the floral shop is willing to sell at various prices. b. number of people who need flowers. c. quantity of people who want to buy these flowers. d. number of flowers that will be purchased at various prices.
Which of the following is a positive economic statement?
A) The standard of living in the United States should be higher. B) If the price of iPhones falls, a larger quantity of iPhones will be purchased. C) The government should revamp the health care system. D) The U.S. government should not have bailed out U.S. auto manufacturers.