Modeling Trade in Imperfectly Competitive Industries Is Problematic Because

question 26

Multiple Choice

Modeling trade in imperfectly competitive industries is problematic because

• A)there is only a single model of imperfect competition (monopoly)but imperfect competition can take many forms in the real world.
• B)there is no single generally accepted model of behavior by imperfectly competitive firms.
• C)there are no models of imperfectly competitive behavior.
• D)it is difficult to find an imperfectly competitive firm in the real world.
• E)collusion among imperfectly competitive firms makes usable data rare.

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Definitions:

Increasing-Cost Industry

An industry in which production costs increase as output expands, often due to scarce resources or rising input prices.

Industry Expands

The process of a sector in the economy growing due to an increase in demand, production, and often, employment.

Allocative Efficiency

A state of the economy where the distribution of resources among different uses is optimal, ensuring that the goods being produced are what consumers prefer the most.

Producing Output

The process of generating goods or services as the result of economic activity.