In the New Keynesian View a Monopolistically Competitive Firm May

question 13

Multiple Choice

In the new Keynesian view a monopolistically competitive firm may fail to increase the price of its product as demand increases because

• A)if it does so it will lose all of its customers.
• B)the cost to it of changing prices may exceed the benefit of doing so.
• C)prices of monopolistically competitive firms are regulated by the federal government and may only be changed with permission.
• D)for a monopolistically competitive firm, price is below marginal cost.

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Definitions:

Attitudes

A learned tendency to evaluate things in a certain way, which can include evaluations of people, issues, objects, or events.

Subjective Norms

Individual beliefs about how people they care about will view their behavior in a given context.

Implicit Attitudes

Unconscious beliefs or feelings that influence an individual's responses and behaviors without their awareness.

Peripheral Route

A method of persuasion that relies on superficial cues rather than the substantive quality of an argument, as delineated in the Elaboration Likelihood Model.