The demand curve in monopolistic competition slopes downward because of:
a. strong barriers to entry.
b. product differentiation.
c. the small number of firms.
d. government regulation.
e. the similarities of the businesses.
b
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When a firm in a monopolistically competitive market earns zero economic profit, its product price must equal marginal cost
a. True b. False Indicate whether the statement is true or false
Assume the demand function for good X can be written as Qd = 80 - 3Px - 2Py + 10I where Px = the price of X, Py = the price of good Y, and I = Consumer income. This equation implies that X and Y are complements
Indicate whether the statement is true or false
An increase in uncertainty about the future will tend to ________ precautionary saving and ________ the desired level of wealth for households
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
Over the long run, a government's fundamental source of revenues is
A) printing money. B) user fees and taxes. C) exports. D) gold sales.