Which of the following is a criticism of the theory of monopolistic competition?
A. It is difficult to define a monopolistically competitive market and to determine the firms and products that comprise it
B. When product differentiation is slight, each firm's demand curve is nearly horizontal so the perfectly competitive solution provides an adequate approximation to the monopolistically competitive solution
C. When there are strong brand preferences and few producers of many differentiated products, or when there are many producers but only a few compete as rivals for any given consumer, the oligopoly solution then provides an adequate approximation to the monopolistically competitive solution
D. All of the above
Answer: Option D
The capital that is consumed by an economy or a firm in the production process is known as
A. Capital loss
B. Production cost
C. Dead-weight loss
D. Depreciation
Who propounded the opportunity cost theory of international trade?
A. Ricardo
B. Marshall
C. Heckscher & Ohlin
D. Haberler
Which among the following statement is INCORRECT?
A. On a linear demand curve, all the five forms of elasticity can be depicted
B. If two demand curves are linear and intersecting each other, then, coefficient of elasticity would be same on different demand curves at the point of intersection.
C. If two demand curves are linear and parallel to each other, then, at a particular price, the coefficient of elasticity would be different on different demand curves.
D. The price elasticity of demand is expressed in terms of relaive not absolute changes in Price and Quantity demanded.
A. Increase
B. Decrease
C. Remain the same
D. Become zero
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