How does an increase in competition in an industry usually affect productivity?
What will be an ideal response?
Increase in competition in an industry changes work rules in a way that allows for a more flexible allocation of labor across tasks and better utilization of resources. This leads to a significant increase in productivity in the industry.
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A monopoly is a firm that:
A. is the sole producer of a good or service with no close substitutes. B. is the sole producer of a good or service with many close substitutes. C. is the producer of a good or service with just a few large competitors. D. produces a good or service that is identical to many others sold in the market.
Studies by economists have tended to show that countries with more independent central banks have:
A. more inflation. B. less inflation. C. higher unemployment. D. lower unemployment.
The last year we did not have a deficit in our current account was
A. 1960. B. 1973. C. 1986. D. 1991.
Which of the following is true of normal profits?
A. They are necessary to keep a firm in the industry in the long run B. They are zero under pure competition in the long run C. They are excluded from a firm's costs of production D. They are what attract other firms to enter an industry