Author Question: What is NAFTA? What will be an ideal response?[br][br][b][color=#7BCCB5]Question ... (Read 30 times)

joe

  • Hero Member
  • *****
  • Posts: 627
What is NAFTA?
 
  What will be an ideal response?

Question 2

Comment on the following statement: The demand facing a firm in perfect competition is less elastic than the demand facing a firm in monopolistic competition.
 
  What will be an ideal response?



Joc

  • Sr. Member
  • ****
  • Posts: 317
Answer to Question 1

NAFTA, or the North Atlantic Free Trade Agreement is an agreement signed by the United States, Mexico, and Canada in which the three countries agreed to establish all North America as a free-trade zone.

Answer to Question 2

The statement is false. Firms in perfect competition face a large number of perfect substitutes for their products. Thus, the demand facing a firm in perfect competition is perfectly elastic (horizontal). While firms in monopolistic competition face a number of close substitutes, they are the only producers of their particular products. This gives them some ability to set the prices of their products without losing all demand. Thus, the demand curve faced by a firm in monopolistic competition is downward sloping and less elastic than that faced by a firm in perfect competition.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question

joe

  • Hero Member
  • *****
  • Posts: 627

Joc

  • Sr. Member
  • ****
  • Posts: 317

 

Did you know?

Eat fiber! A diet high in fiber can help lower cholesterol levels by as much as 10%.

Did you know?

Human kidneys will clean about 1 million gallons of blood in an average lifetime.

Did you know?

After a vasectomy, it takes about 12 ejaculations to clear out sperm that were already beyond the blocked area.

Did you know?

The first oncogene was discovered in 1970 and was termed SRC (pronounced "SARK").

Did you know?

Walt Disney helped combat malaria by making an animated film in 1943 called The Winged Scourge. This short film starred the seven dwarfs and taught children that mosquitos transmit malaria, which is a very bad disease. It advocated the killing of mosquitos to stop the disease.

For a complete list of videos, visit our video library