One difference between perfect competition and monopolistic competition is that
a. in perfect competition, firms cannot earn a long-run economic profit
b. in perfect competition, firms take full advantage of economies of scale in long-run equilibrium; in monopolistic competition, firms do not
c. only under perfect competition is there ease of entry and exit
d. in monopolistic competition, the firm's demand curve is horizontal; in perfect competition, the firm's demand curve slopes downward
e. in perfect competition, there are many firms; under monopolistic competition, there are few firms
B
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An oligopolist operating with a kinked demand curve would expect rivals to match both its price increases and price decreases
a. True b. False Indicate whether the statement is true or false
Suppose an economy is initially in equilibrium and there is a sudden increase in oil prices. Which of the following is the most likely result?
a. Growth in real GDP b. Price stability c. Full employment output d. Stagflation e. Deflation