Compared to a perfectly competitive firm, the demand curve facing a monopolistically competitive firm is
A) less elastic because monopolistically competitive firms produce similar, but not identical, products.
B) more elastic because in the long run, the demand curve is tangent to the firm's average total cost curve.
C) just as elastic because there are many sellers in both markets.
D) more elastic because there are many close substitutes for the product of a monopolistically competitive firm.
A
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If government spending is $650 billion while government revenue is $950 billion, the government is said to have a
A) $300 billion budget surplus. B) $300 billion budget deficit. C) $1,600 billion budget balance. D) $950 billion budget deficit.
Sue consumes only sub sandwiches and Mountain Dew. Subs and Mountain Dew are complements. If the price of a Mountain Dew increases
A) Sue's demand curve for sub sandwiches will shift rightward. B) Sue will move downward along her demand curve for Mountain Dews. C) Sue will move upward along her demand curve for Mountain Dews. D) Both answers A and C are correct.