Under monopolistic competition, the number of firms increases as fixed entry costs fall and as demand for the type of good produced in the market increases.
Answer the following statement true (T) or false (F)
True
Rationale: Fixed entry costs keep firms from coming into the market to make the positive profit that firms in the market are earning -- so a decrease in fixed entry costs implies more firms will enter. And as more consumers demand these goods, there is more "room" in the market for firms to enter.
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Absent any violations of the first welfare theorem, the competitive market production level of a good will be the same as that chosen by a social planner whose goal includes (but is not necessarily limited to) efficiency.
Answer the following statement true (T) or false (F)
Profit is the difference between
A) total revenue and total explicit cost. B) total revenue and total cost. C) total revenue and variable cost. D) marginal revenue and marginal cost.
Historically, Brazil has suffered higher and more variable rates of inflation than Venezuela
You would expect the short-run aggregate supply curve of Brazil to be ________ than that of Venezuela, and the short-run Phillips curve of Brazil to be ________ than that of Venezuela. A) flatter; flatter B) flatter; steeper C) steeper; flatter D) steeper; steeper
The use of specialization to achieve economies of scale is one reason modern societies are as prosperous as they are
a. True b. False Indicate whether the statement is true or false