When a firm decides to retain its earnings instead of paying dividends, the stockholders necessarily suffer
a. True
b. False
Indicate whether the statement is true or false
False
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Firms in monopolistically competitive markets spend significant sums on product differentiation because:
a. it enables them to earn positive profits in the short run. b. it increases the elasticity of demand for a firm's product. c. it reduces the number of competitors. d. it causes the firm's supply curve to become horizontal so the firm can expand output indefinitely. e. it causes the firm's demand curve to become horizontal so that it can charge a fixed price for its product.
If the price level is fixed, then changes in nominal income will be equivalent to changes in real income
a. True b. False Indicate whether the statement is true or false
Teenagers generally have high marginal revenue products because they have not completed their educations and have little job experience
a. True b. False Indicate whether the statement is true or false
Refer to Figure 6-19. Suppose a tax of $2 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?
a. $3
b. Between $3 and $5
c. Between $5 and $7
d. $7