Why are economists less worried about industry concentration than they once were?
What will be an ideal response?
There are several reasons why economists are less worried about highly concentrated industries. First, the theory of contestable markets suggests that firms in highly concentrated industries can be pushed to produce efficiently under the right market conditions. Second, there are real benefits of product differentiation. Third, firms in highly concentrated industries appear to spend a great deal on research and development. Last, substantial economies of scale in some industries preclude a completely competitive structure.
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As used in this text, "autonomous" variables are
A) spontaneous variables that are completely unpredictable. B) completely independent of income, although they can be explained by movements in other variables. C) determined only by income levels. D) the same as endogenous variables.
Assuming that w and r are both positive, if the long-run expansion path is horizontal, then
A) = 0. B) MRTS is a function of capital only. C) w = r. D) All of the above.