A) quantity demanded falls to zero.
B) quantity demanded declines but not to zero.
C) the market supply curve shifts outward.
D) quantity demanded remains constant.
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A) Galbraith thought advertising artificially enhanced consumers' desires for private goods,while Hayek thought no producer could "determine" consumers' tastes though advertising.
B) Galbraith believed in enhancing personal freedoms,while Hayek advocated larger government.
C) Galbraith thought advertising was a waste of resources because it did not influence consumers,while Hayek thought advertising was powerful enough to "determine" consumers' tastes.
D) Galbraith believed that the government should not interfere in markets,while Hayek believed that there was insufficient government regulation of marketing.
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A) a short-run equilibrium but it is not in a long-run equilibrium.
B) a long-run equilibrium but it is not in a short-run equilibrium.
C) a short-run equilibrium as well as a long-run equilibrium.
D) neither a short-run equilibrium nor a long-run equilibrium.
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A) By seeing famous people using the product,consumers infer that they too can be famous.
B) By being willing to spend money on advertising,firms let consumers know the product is likely a good one since firms would not likely advertise a poor product.
C) By making consumers laugh during commercials,firms are associating positive experiences with the product.
D) Without allowing consumers to actually use the product,it is not possible for firms to signal to consumers the product's quality.
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A) monopolies,but not competitive firms or monopolistically competitive firms
B) monopolies and monopolistically competitive firms,but not competitive firms
C) monopolies,monopolistically competitive firms,and competitive firms
D) No firms earn positive economic profit in the long run.Entry will reduce all firms' economic profit to zero in the long run.
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Recognizable brand names signal quality ...View Answer
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A) marginal revenue is equal to price for each firm.
B) profit is positive in a long-run equilibrium for each firm.
C) entry and exit by firms are restricted.
D) there are many firms in a single market.
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A) is a feature of all monopolistically competitive firms.
B) means that the firm in question will never experience a zero profit.
C) causes marginal revenue to exceed price.
D) prohibits firms from earning positive economic profits in the long run.
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A) the short run but not in the long run.
B) the long run but not in the short run.
C) both the short run and the long run.
D) neither the short run nor the long run.
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A) marginal revenue equals marginal cost.
B) it has a deadweight loss,just as monopoly does.
C) long-run profits are zero due to free entry.
D) All of the above are correct.
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A) firms in the industry are typically characterized by very diverse product lines.
B) firms in the industry have some degree of market power.
C) products typically sell at a price equal to their marginal cost of production.
D) the actions of one seller have no impact on the profitability of other sellers.
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A) price falling short of marginal cost in order to increase market share.
B) price exceeding marginal cost.
C) the firm operating in a regulated industry.
D) excessive advertising costs.
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A) perfect competition
B) monopoly
C) monopolistic competition
D) perfect competition and monopolistic competition
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A) Monopolistic competition is similar to monopoly because both market structures are characterized by patents.
B) Monopolistic competition is similar to perfect competition because both market structures are characterized by each seller being small compared to the market.
C) Monopolistic competition is similar to oligopoly because both market structures are characterized by free entry.
D) Monopolistic competition is similar to perfect competition because both market structures are characterized by excess capacity.
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A) competition and oligopoly
B) competition and monopoly
C) monopoly and monopolistic competition
D) oligopoly and monopolistic competition
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A) Firms produce more output than is socially desirable.
B) The output produced by a typical firm is less than what would occur at the minimum point on its ATC curve.
C) Due to product differentiation,firms choose output levels where price equals average total cost.
D) Firms keep some surplus output on hand in case there is a shift in the demand for their product.
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A) they will still earn zero economic profit.
B) they can earn positive economic profit by increasing market share.
C) the market price must fall.
D) the market price must rise.
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