Which of the following is a difference between an oligopoly with differentiated products and a monopolistic competition?
A) There are no barriers to entry in an oligopoly with differentiated products, while there are huge barriers to entry in a monopolistic competition.
B) There are huge barriers to entry in an oligopoly with differentiated products, while there are minimal barriers to entry in a monopolistically competitive market.
C) Firms in an oligopoly market with differentiated products charge a price higher than marginal cost in the long run, while firms in a monopolistic competition charge a price lower than marginal cost in the long run.
D) Firms in an oligopoly with differentiated products charge a price lower than average total cost in the long run, while firms in a monopolistic competition earn a price higher than average total cost in the long run.
B
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Based on the data in the above table, to assure that the efficient amount is produced the government can
A) subsidize the suppliers $8 per unit. B) subsidize the suppliers $2 per unit. C) tax suppliers $2 per unit. D) tax suppliers $8 per unit.
The big tradeoff between equality and efficiency exists because
A) redistribution uses resources and weakens incentives to work. B) redistribution uses resources and strengthens incentives to work. C) redistribution creates additional resources and weakens incentives to work. D) redistribution creates additional resources and strengthens incentives to work.