Which of the following represents the best government policy to reduce the deadweight loss associated with a monopolistically competitive market?
a. The government should regulate firms in a manner similar to natural monopolies.
b. The government should encourage more firms to enter the industry because without government intervention, there are likely to be "too few" firms.
c. The government should encourage some firms to exit the industry because without government intervention, there are likely to be "too many" firms.
d. There is no government policy that can reduce deadweight loss without creating other problems.
d
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In an oligopoly, when the quantity effect outweighs the price effect:
A. an increase in output may increase the firm's profits. B. a decrease in output may increase the firm's profits. C. keeping output constant and raising price will increase the firm's profits. D. keeping output constant and lowering price will increase the firm's profits.
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Indicate whether the statement is true or false
In the years immediately after the American Revolution
A. both labor and capital were scarce. B. neither labor nor capital were scarce. C. labor was scarce and capital was plentiful. D. capital was scarce and labor was plentiful.