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In monopolistic competition:
a) Firms face a perfectly elastic demand curve
b) All products are homogeneous
c) Firms make normal profits in the long run
d) There are barriers to entry to prevent entry
Fiscal Policy An Increase in Government Spending: Figure 1 Let us examine how an increase in government spending affects the interest rate and the level of income.
Q. State the Marginal Productivity Theory. What are its features and assumption? Marginal Productivity Theory of distribution states that in a capitalist economy the demand for
The price of gasoline has recently come down as has the quantity. Show graphically and explain what might have caused this.
The Price ceiling is the law that sets a maximum price below the equilibrium market price, but a price floor is the law that sets a maximum price above the market equilibrium price
Definition of Money We should define what we mean by money. Money has a long as well as interesting history and an understanding of how we came to use money is useful for any
The market for quits is initially competitive and the market demand is: P=400-0.4QD. The Combined marginal costs of the firms in the quit industry are: MC=50+0.6Q. a. Draw the
Subsidy programs are likely to have a number of secondary effects in addition to the direct effect on dairy prices. What impact do you suppose farm subsidies are likely to have on
Determine about the Inflation rate For many central banks, this is the variable they are mostly interested in controlling. For all central banks, it is an important variabl
Currently you purchase 6 packages of hot dogs a month. You will graduate from college in December, and you will start a new job in January. You have no plans to purchase hot dogs i
Suppose the demand and supply for milk is described by the following equations Qd=600-100P; Qs=-150+150P Where P is the price in rand, Qd is the quantity demanded in millions of l
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