In a competitive market, if buyers did not know all the prices charged by the many firms,
A) all firms still face horizontal demand curves.
B) firms sell a differentiated product.
C) demand curves can be downward sloping for some or all firms.
D) the number of firms will most likely decrease.
C
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If the velocity of money is constant, then
A) a change in nominal GDP can be caused only by a change in the money supply. B) a change in the money supply can be caused only by a change in the price level. C) a change in the money supply is negatively related to a change in nominal GDP. D) a change in the money supply would result in no change in nominal GDP.
Within the framework of the Keynesian Cross model, if an economy is operating at a real GDP less than full-employment real GDP:
a. a recessionary gap exists b. an inflationary gap exists c. aggregate expenditures will rise d. the general level of prices will rise