One In the News article is titled "The Cola Wars: It's Not All Taste." Firms in a monopolistically competitive industry, such as the soft drink market, are likely to
A. Advertise to create brand loyalty.
B. Behave exactly like a monopoly.
C. Attempt to reduce market power.
D. Meet together to set prices.
Answer: A
You might also like to view...
The neoclassical theory of investment
A) links investment spending to stock prices. B) emphasizes that current investment spending depends positively on the expected future growth of GDP. C) emphasizes the role of real interest rates and taxes as determinants of investment. D) suggests that a downturn in real GDP will lead to a sharp fall in investment, which leads to further reductions in GDP through the multiplier.
Which of the following is not a type of portfolio investment?
(a) Investment in stocks. (b) Multinational corporation investment. (c) Investment in commercial paper. (d) All are types of portfolio investment. (e) None are types of portfolio investment.
Which of the following is true when profit-maximizing firms in a competitive market are allowed to freely emit negative externalities on society?
a. Consumers are paying a market equilibrium price that reflects the full social marginal cost of production. b. Consumers are paying a market equilibrium price that reflects only the external marginal cost of production. c. Consumers are paying a market equilibrium price that is less than the socially efficient price, and consuming more than the socially efficient quantity. This means society is implicitly subsidizing producers by allowing them to pollute. d. None of the above is correct.
The labor supply curve:
A. is made up of firms who want to hire workers at each given wage. B. is made up of workers who want to work for firms at each given wage. C. shows number of firms who are willing and able to hire workers at each given wage. D. shows that the number of firms who want to hire workers decreases as the wage increases.