What characteristic of monopolistic competition may help to offset the inefficiency of this market structure?
A) Free entry and exit imply that firms produce at minimum long-run average cost.
B) Consumers may value the product diversity that allows them to choose from a wide variety of differentiated products.
C) Consumers may feel better about the inefficiency if they know that firms earn zero profits.
D) Consumers may prefer this outcome to monopoly or monopsony.
B
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Which of the following statements is correct?
A) The price level does not affect the level of real GDP demanded. B) The lower the price level, the more the aggregate demand curve shifts rightward. C) The lower the price level, the greater the quantity of real GDP demanded. D) The higher the price level, the more the aggregate demand curve shifts rightward. E) The lower the price level, the more the aggregate demand curve shifts leftward.
If the expansion of an export industry leads to the provision of infrastructure such as roads or airports, this is called a(n)
A) secondary effect. B) linkage effect. C) elementary effect. D) None of the above.