The monopolistic competition market structure is characterized by:
A. few firms and similar products.
B. many firms and differentiated products.
C. many firms and a homogeneous product.
D. few firms and a homogeneous product.
Answer: B
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The higher the expected inflation rate in a country, the lower is the nominal interest rate in that country
Indicate whether the statement is true or false
In both price-taker and competitive price-searcher markets, when an increase in market demand disrupts a long-run equilibrium, it will lead to
a. higher short-run prices and long-run profits. b. higher short-run prices, short-run profits, and the entry of additional firms into the market. c. higher short-run prices and the exit of firms from the market due to economies of scale. d. no change in prices in the short run, but new firms will enter in the long run.