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Question
Monopolistically competitive firms are troublesome to regulate for all of the following reasons, EXCEPT
a. they comprise a large proportion of the economy.
b. their market and political power renders them virtually untouchable.
c. it could result in fewer choices for consumers.
d. regulating prices only magnifies the inefficiency typical of these firms.
e. the government may be forced to subsidize firms to keep them in business.
Answer
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Related questions
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Price gouging laws will usually result in ________ the product in the distressed market.
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The economic entity most likely to engage in price gouging is
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What will an individual do differently as a buyer in the black market in the long run?
a. He or she will substitute away from the product.
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What is the long-run consequence of a price ceiling law?
a. A surplus will continue to exist and will grow larger over time.
b. A surplus will continue to exist and will grow smaller over time.
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Q:
Suppose Solomon lives in a community with no price controls. What do you expect will happen if his town borders a community where there is a binding price ceiling on most products?
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A(n) ________ in the elasticity of supply or demand in a market for a good that is taxed would tend to ________ who is legally responsible for paying the tax.a. decrease; broaden b. decrease; have no effect on c. increase; broadend. increase; narrowe. increase; have no effect on
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e. The supply of jelly will decrease and the price will increase.
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Q:
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