A major distinction between a monopolistically competitive firm and an oligopolistic firm is that
A. one is a price taker and the other is a price maker.
B. one necessarily faces a downward-sloping demand curve and the other a horizontal demand curve.
C. one always produces differentiated products and the other always produces a homogeneous product.
D. a recognized interdependence exists between firms in one industry but not in the other.
Answer: D
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For a given quantity, the total profit of a perfectly competitive firm is equal to the vertical distance between the firm's total revenue curve and its total cost curve
Indicate whether the statement is true or false
An example of exclusive dealing occurs when
a. one individual serves on more than one board of directors b. one individual serves on only one board of directors c. a producer sells spark plugs to a car manufacturer with the understanding that the manufacturer will buy spark plugs only from that producer d. the seller offers a good for sale to an individual (or a limited group) on substantially better terms than is available to the general public e. a producer of spark plugs requires that customers also purchase rotors when they buy spark plugs
If the income elasticity of a good is positive, we can conclude that the good is
a. an inferior good. b. a normal good. c. a luxury good. d. a necessity.
Which of the following government outlays would be classified as a transfer payment?
A) payments of veterans benefits under the GI bill B) interest on the federal debt C) subsidies to gold-mining firms D) all of these