If some firms leave a monopolistically competitive market, the
a. remaining firms will charge a lower price to try to capture the released market share
b. remaining firms' cost curves will shift upward and to the right
c. remaining firms' demand curves will shift to the left
d. market demand curve shifts to the right
e. remaining firms will produce at a different point on their ATC curves
E
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Beginning in 1965, the head of the Antitrust Division of the U.S. Department of Justice began to change antitrust policy. How did antitrust policy change?
A) For the first time horizontal mergers were allowed—with government approval—and vertical mergers were allowed without need for approval from the government. B) For the first time concentration ratios were used to evaluate the degree of competition in the industries of firms that proposed mergers. C) Proposed mergers no longer needed the approval of the Federal Trade Commission or the court system. D) The Division began to systematically consider the economic consequences of proposed mergers.
Budget projections for 2014-2020 indicate both higher levels of government spending and large budget deficits. According to the Keynesian view, this will lead to
a. an increase in aggregate supply during that decade. b. weak aggregate demand and a continuation of recessionary conditions. c. an increase in aggregate demand and real output. d. higher interest rates and taxes that will retard future growth.