Because there are low barriers to entry in a monopolistically competitive market
A. they produce a homogeneous product.
B. the firms are price takers.
C. there is no non-price competition.
D. there are many firms in the industry.
Answer: D
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Figure 4.3 illustrates the demand for tacos. Assume that tacos and beer are complements. A decrease in the price of beer would bring about a movement from
A) point a to point c. B) point c to point a. C) D2 to D0. D) D0 to D2.
According to traditional Keynesians, monetary policy is ineffective in affecting the economy during a recession because
A) an increase in the money supply will have little impact on interest rates. B) an increase in the money supply will only lead to higher interest rates. C) an increase in the money supply will only lead to lower investment spending. D) an increase in the money supply will raise the amount of government debt.
The difference, in terms of economic goals, between developing countries and developed countries is that:
A. developing countries focus primarily on achieving an equitable distribution of income, while developed countries focus on higher economic growth rates. B. there are no differences between the economic goals of developing and developed countries. C. developing countries focus primarily on achieving economic stability, while developed countries focus on an acceptable growth rate. D. developing countries focus primarily on meeting basic needs, while developed countries focus on economic stability.
If a monopolist is producing the quantity at which marginal revenue equals marginal cost, it should
A) continue to produce this amount if it wants to maximize profits. B) reduce output if it wants to maximize profits. C) increase price and keep output unchanged if it wants to maximize profits. D) increase output if it wants to maximize profits.