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Which of the following is not put forth as a criticism of advertising and brand names ? A. Advertising manipulates people’s tastes to create a desire that otherwise would not existB. Advertising increase competition Which causes unnecessary bankruptcies and layoffs. C. Advertising increases brand loyalty causes demand to be more inelastic and thus, increase mark-up…
Which of the following firms is most likely to spend a large percentage of their revenue on advertising ? A. the producer of a highly differentiated consumer product B. the manufacturer of an undifferentiated consumer commodity C. a perfect competitor D. The manufacturer of an industrial product E. The producer of a low-quality product that…
The use of word “competition” in the name of the market structure called “monopolistic competition” refers to the fact that ? A. there are many sellers in a monopolistically competitive market and there is free entry and exit in the market just like a competitive market B. Monopolistically competitive firms face a downward-slog demand curve…
One source of inefficiency in monopolistic competition is that since price is above marginal cost, some units are not produced that buyers value in ? A. Since price is above marginal cost surplus is redistributed from buyers to sellers B. monopolistically competitive firms earn economic profits in the long run C. monopolistically competitive firms produce…
Which of the following firms has the least incentive to advertise ? A. a manual fracture of breakfast cerealB. a wholesaler of crude oil C. a restaurant D. a manufacturer of home heating and air conditioning
In the short run, if the price is above average total cost in a monopolistically competitive market, the firm makes ? A. losses and firms exit the market B. profits and firms exit the market C. losses and firms enter the marketD. profits and firms enter the market
Which of the following products is least likely to be sold in a monopolistically competitive market ? A. breakfastB. cotton C. video games D. beer
Which of the following is not an argument put forth by economists in support of the use of advertising ? A. Advertising increases competition B. Advertising provides information to customers about prices, new products and location of retail outlets.C. Advertising provides a creative outlet for artists and writers D. Advertising provides new firms with the…
Defenders of the use of brand names argue that brand names ? A. all of these answers B. are useful even in socialist economics such as the former Soviet Union C. provide information about the quality of the product give firms incentive to maintain high quality
The use of the word “monopoly” in the name of the market structure called “monopolistic competition” refers to the fact that ? A. monopolistically competitive firms charge prices equal to their marginal costs just like monopolistsB. a monopolistically competitive firms faces a downward-slog demand curve for its differentiated product and so does a monopolist C….