In a monopolistically competitive market,
a. entry by new firms is impeded by barriers to entry; thus, the number of firms in the market is never ideal.
b. entry by new firms is impeded by barriers to entry, but the number of firms in the market is nevertheless always ideal.
c. free entry ensures that the number of firms in the market is ideal.
d. there may be too few or too many firms in the market, despite free entry.
Ans: d. there may be too few or too many firms in the market, despite free entry.
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Often managers require a payment due to their risk aversion. This payment is called
A) a golden parachute. B) greenmail. C) a poison pill. D) rollover compensation
The cost associated with foregoing the opportunity to employ a resource in its best alternative use is called:
A. an avoidable cost. B. a sunk cost. C. an opportunity cost. D. the user cost of capital.