Economic analysis of a monopolistically competitive industry is more complicated than that of pure competition because:
A. of product differentiation and consequent product promotion activities.
B. monopolistically competitive firms cannot realize an economic profit in the long run.
C. the number of firms in the industry is larger.
D. monopolistically competitive producers use strategic pricing strategies to combat rivals.
Answer: A
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When a tax is placed on the sellers of a product, buyers pay
A. more, and sellers receive more than they did before the tax. B. more, and sellers receive less than they did before the tax. C. less, and sellers receive more than they did before the tax. D. less, and sellers receive less than they did before the tax.
If your demand for gasoline is inelastic, when the price of gasoline falls, which of the following occurs?
A) Your demand curve for gasoline will shift leftward. B) Your demand curve for gasoline will shift rightward. C) Your total expenditure on gasoline will increase. D) Your total expenditure on gasoline will decrease.