PART 6: True or false and multiple-choice questions Question 16: True or false, firms in situation of...

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Economics

PART 6: True or false and multiple-choice questions
Question 16: True or false, firms in situationof monopolistic competition have deadweight losses associated withmonopoly because of barriers to entry.
Question 17: Which of the two demands functionsbelow is most elastic
A) Qa=100-2p
B) Qb=120-p
Question 18: If a buyer values an object for $4and a sellerâ€™s cost is $1, which of the statements below isfalse!
If a transaction takes place, total surplus will beequal to $3
For the exchange to occur, the price has to be equal to $2.50,no other prices will allow an exchange to occur.
Whenever an exchange takes place, the allocation isefficient.
The buyer is ready to pay up to $4 for the object
Question 19: True or false, pricediscrimination is inefficient.
Question 20: Which of these goodsâ€™ demand islikely to be most inelastic
An inhaler for asthmatic people
A generic soft drink brand
Cellphones
Airline tickets

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Answer Question 16 FALSE In monopolistic competition there are no barriers to entry The deadweight loss is because the firms in monopolistic competition charge a price higher than the marginal cost and See Answer

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