Innovation creates the opportunity to:
A. quickly exit industries.
B. lose money spent on research and development.
C. earn positive economic profits.
D. sustain zero economic profits in a single industry in the long run.
C. earn positive economic profits.
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Refer to Figure 15-10. Compared to a perfectly competitive market, consumer surplus is lower in a monopoly by an amount equal to the
A) area FGE. B) area FHE. C) area P1P2EF. D) area P1P2GF.
Banks keep ________ of deposits as reserves because on a typical day withdrawals are ________ deposits
A) more than 100%; much greater than B) exactly 100%; about the same as C) less than 100%; about the same as D) less than 100%; much greater than
Which of the following is NOT true of monopolistic competition?
A) Firms produce a good that is a perfect substitute for their competitors' goods. B) There is free entry and exit. C) There are a large number of firms. D) Firms can compete on price and quality.
Inflation is defined as
A) the rate of increase in the government budget deficit. B) the increase in the money supply. C) the rate of change in the average level of prices. D) the nominal interest rate minus the price level.