Which of the following is true about advertising?
A. Firms spend money on advertising in an attempt to make the demand curve more elastic.
B. Advertising may be the only way that a new entrant can penetrate a market dominated by long-established firms.
C. Advertising has no impact on entry costs or market structure.
D. Firms consider advertising to be successful if it succeeds in lowering the long-run average cost.
Answer: B
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A substantial increase in the legal minimum wage will tend to
A) expand employment by increasing purchasing power and hence the demand for output. B) improve the position of the least skilled persons in the labor force. C) reduce employment by raising the cost of hiring some employees above their expected worth to potential employers. D) reduce the wages of highly skilled and highly paid employees.
Large countries tend to be more open than small countries
Indicate whether the statement is true or false
In centrally planned economies, most prices are not
a. established by central planners b. inflexible c. set below the market-clearing level d. based on consumer demand e. the cause of shortages of supply
Exhibit 4-10 Supply and demand data for apricots Bushels demandedper month Price perbushel Bushels suppliedper month 50 $5 80 55 4 75 60 3 70 65 2 65 70 1 55 In Exhibit 4-10, assume that the government initially sets a price floor of $4 for apricots, and then removes the $4 price floor. What effect will this price change have?
A. The price of apricots will rise. B. The quantity of apricots demanded will fall. C. The quantity of apricots supplied will decline. D. Quantity supplied will continue to exceed quantity demanded.