A monopolistically competitive firm is like a monopoly firm insofar as
A) both face perfectly elastic demand.
B) both earn an economic profit in the long run.
C) both have MR curves that lie below their demand curves.
D) neither is protected by high barriers to entry.
C
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When the goods of competing companies are identical, consumers have no reason to prefer one product over the other so the demand curve for each manufacturer will be perfectly elastic
a. True b. False Indicate whether the statement is true or false
Fiscal policy:
a. Is a powerful tool because budget deficits add directly to Aggregate Demand with no offsetting changes in consumption, investment, and/or net exports. b. May not be a powerful tool if most government expenditures are fixed and unchangeable in the short run. c. Is not a powerful tool because the government has very little control over a nation's monetary base and/or money multiplier. d. Is a powerful tool because of the decisive movements in the automatic stabilizers.