The video rental market can be described as a monopolistically competitive market. As a result of the economic profit earned by the first video rental outlets,
a. existing firms were able to successfully lobby the government for patent protection
b. competitors were attracted to the industry, and their entry reduced economic profit
c. demand dried up
d. Blockbuster saw an opportunity to take over the industry
e. competitors were discouraged from entering the industry
B
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What does the phrase "internalizing an external cost" mean?
A) forcing producers to factor into their production costs the cost of the externalities created in the production of their output B) finding a way to address cross-border pollution C) limiting the extent to which domestic firms can outsource production D) prohibiting economic activities that create externalities
Membership in a customs union may be either welfare improving or welfare worsening. Illustrate and explain
What will be an ideal response?
Price discrimination will occur whenever a firm faces a downward-sloping demand curve
a. True b. False
If expected inflation were 5%, and the real interest rate was 3%, what sector would be worse off if the actual inflation rate turned out to be 2%
a. Businesses. b. Laborers. c. Both. d. None.