What happens in a monopolistically competitive market with the entry of new firms?
What will be an ideal response?
In a monopolistically competitive market, firms can earn economic profits in the short run. However, this can lead to the entry of new firms in the market. As new firms enter, the demand curve becomes flatter and shifts inward.
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Which of the following is most likely to be a variable cost of production in the short run?
A. Real estate taxes B. Rental payments on IBM equipment C. The interest on a business loan D. Fuel and power payments
________ is defined as the increase in domestic assets held by foreigners minus the increase in foreign assets held domestically
A) Net transfers B) The current account C) The financial account D) Net exports
What are the two components of federal spending?
What will be an ideal response?
A negative externality is a situation in which
A) there is a spillover of benefits. B) a cost associated with an economic activity is borne by a third party. C) a firm is paying in excess of the total costs of producing a good. D) none of the above.