Author Question: Governments can use subsidies ________. A) as a means of increasing government spending B) when ... (Read 40 times)

RYAN BANYAN · **on:** Jun 29, 2018

Governments can use subsidies ________.

A) as a means of increasing government spending
B) when they want to increase taxes
C) to achieve an efficient outcome if there are external costs
D) to achieve an efficient outcome if there are external benefits

Question 2

How do product development and marketing affect a firm in monopolistic competition?

What will be an ideal response?

atrochim · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

D

Answer to Question 2

Product development and marketing have two effects on a firm. First, because these activities are costly, they increase the firm's costs and shift its costs curves upward. Second, they can increase the demand for the firm's products.