Which of the following statements is true of a perfectly competitive market?
A) Innovation is less likely in a competitive market because of free entry and exit of firms.
B) Innovation is likely in a competitive market because of free entry and exit of firms.
C) The firms in a competitive market invest more in R&D because they face an inelastic demand curve.
D) The firms in a competitive market invest more in R&D because their demand for resources is perfectly elastic.
A
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If a product has very few substitutes, demand elasticity is likely to be
A) 1. B) elastic. C) infinitely elastic. D) inelastic.
Which of the following is NOT a mechanism the HPAE used to share wealth across all layers of society?
A) significant investments in rural infrastructure B) free public education C) tax policies that strongly redistributed income from rich to poor D) land reform