The Chamberlin model has been criticized for all but which one of the following reasons?
A. The model adds little to the perfect competition conclusions.
B. The concept of an industry group is ambiguous in the model.
C. The model predicts no long-run profits but does not account for entry and exit in markets.
D. Consumers are not as willing to switch from one product another for slight price changes.
Answer: C
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The figure above illustrates a linear demand curve. If the price rises from $6 to $8 demand is ________ and if the price falls from $8 to $6 demand is ________
A) elastic; elastic B) elastic; inelastic C) inelastic; elastic D) inelastic; inelastic
If the Fed wanted to shift to a restrictive monetary policy and reduce the money supply, it could
a. increase the interest rate paid on excess reserves encouraging banks to extend more loans. b. decrease the interest rate paid on excess reserves encouraging banks to extend more loans. c. decrease the interest rate paid on excess reserves encouraging banks to hold excess reserves rather than extend more loans. d. increase the interest rate paid on excess reserves encouraging banks to hold excess reserves rather than extend more loans.