Significant barriers to entry exist in a monopolistically competitive industry.
Answer the following statement true (T) or false (F)
False
In a monopolistically competitive industry, ease of entry ensures zero economic profits in the long run.
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At a fast food restaurant, a large drink is twice as big as a small drink, but the restaurant charges 79¢ for the small drink and only 99¢ for the large drink. This situation is probably not a case of price discrimination because
a. the restaurant cannot easily prevent resale. b. people who buy large drinks order more food than people who buy small drinks. c. the cost of serving a large drink is not twice the cost of serving a small drink. d. the fast food restaurant has no monopoly power.
Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
The cost of output is income to the land, labor, capital and entrepreneurial talent used to produce it
Indicate whether the statement is true or false
In the absence of discrimination, as human capital investments increase, wages will generally
A) decrease. B) increase. C) not change. D) increase or decrease.