A monopolistically competitive firm is like a monopoly firm insofar as
A) both face perfectly elastic demand.
B) both earn an economic profit in the long run.
C) both have MR curves that lie below their demand curves.
D) neither is protected by high barriers to entry.
C
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Which of the following is not a characteristic of the structure of perfectly competitive markets?
a. Each individual firm is small in size relative to the overall market. b. Few sellers. c. Homogeneous product. d. Easy, low cost entry and exit.
Economic choice and competitive behavior are the result of
What will be an ideal response?
Let: (1 ) Pt be the price of one unit of a market basket of goods (i.e., a composite commodity) in year t; (2 ) Pet+1 be the expected price of one unit of a market basket of goods in year t + 1; (3 ) ?et+1 be the expected rate of inflation between period t and t + 1; and (4 ) it be the one-year nominal interest rate. Suppose an individual borrows the equivalent of one unit of a composite
commodity today. Given this information, which of the following expressions represents (i.e., is equal to) the amount of the composite commodity one must repay in one year? A) (1 + it)(Pet+1)/(Pt) B) (1 + ?et+1)/(1 + it) C) {(1 + ?et+1)/(1 + it)} - 1 D) {(1 + it)(Pt)/(Pet+1)} - 1 E) none of the above
The fast-food industry is not considered perfectly competitive because
A. there is a small number of dominant firms. B. the firm's products are not homogeneous. C. there is a very large number of firms. D. entry and exit are strictly regulated by the government.