The product diversity resulting from monopolistic competition comes at the expense of having:
a. firms that will earn positive profits.
b. firms that are too small to maximize profit.
c. higher profit than would prevail under perfect competition.
d. efficiency in the long run
Ans: d. efficiency in the long run
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The sticky price explanation of the short-run aggregate supply curve says that when the average price level rises,
A. because of adjustment costs associated with changing prices, some firms will not raise their prices immediately which may temporarily boost their sales. B. firms will raise their output prices by more than the increase in the average price level to make up for the shortfall in sales. C. consumers are unwilling to pay higher prices resulting in a decrease in aggregate demand. D. some firms will immediately pass the higher prices to consumers.
Suppose there was a debate regarding how to spend $1 billion in newly found revenues in the budget. Suppose the centrist Democrat suggests an increase to infrastructure spending. Suppose the centrist Republican suggests an increase in cyber-defense spending. Each is arguing that their plan will get the most good for the money. What is going on here?
A. Both are employing marginal analysis, just from different perspectives. B. Only the Republican is using marginal analysis. C. Only the Democrat is using marginal analysis. D. Neither are using marginal analysis.
Which of the following is NOT one of the functions of money?
A) protection from increases in prices of goods and services B) store of value C) medium of exchange D) unit of accounting
A graph that shows the value of an economic variable for different groups in a population at a given time is called a
A) pie chart. B) cross-section graph. C) scatter diagram. D) time-series graph. E) fixed-time diagram.