"It is clear from the theory of monopolistic competition that product development is not pushed to its efficient level." This statement is
A) false because there is so much product differentiation in monopolistic competition.
B) true because there is little incentive to innovate in monopolistic competition.
C) false because there are so many wasteful innovations in monopolistic competition that are merely cosmetic.
D) true because price exceeds marginal revenue in monopolistic competition.
D
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Refer to Figure 14.1. Other things equal, if the U.S. dollar increases in value relative to other currencies, this is best represented as a movement from
A) point X to point Y. B) point X to point Z. C) point Y to point Z. D) point Y to point X.
Constant returns to scale (CRS) implies that when the firm ________
A) doubles all inputs, output more than doubles B) doubles all inputs, output doubles C) doubles all inputs, output increases by less than 100 percent D) doubles all inputs, output remains constant E) none of the above