Entry of new firms in monopolistically competitive industries can convey a negative externality on producers because firms lose customers and profits from the entry of new competitors. This externality is called the
business-stealing externality,
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The accompanying figure shows a single consumer's demand for ice cream at the student union.
If there are 1,000 students on campus during a regular semester, and each student's weekly demand for ice cream is shown above, then when the student union charges $3.00 per scoop, those 1,000 students purchase a total of ________ scoops per week.
A. 2,000 B. 1,000 C. 4,000 D. 400
If the firm were a perfect competitor in the long run, what price would it charge?
Suppose that the wage for musicians decreases relative to other occupations. We know that ________ people will work in music, and the total number of hours worked will ________.
A. more; increase B. more; decrease C. fewer; increase D. fewer; decrease
A company uses 50 workers and 20 units of capital to produce 400 units of output. If this company increases its capital to 30 units and, as a result, its output increases by 100 units, the productivity of labor ________ to ________ units per worker.
A. increases; 10 B. decreases; 4 C. increases; 2 D. increases; 5