Suppose that firms in a monopolistically competitive industry are earning positive economic profits. In this situation, you would expect
A. the number of firms in the market to increase.
B. each firm will experience an increase in its demand.
C. there is a downward shift in the firm’s average cost curve.
D. to observe firms reducing their advertising.
Answer: C
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Use the following diagram to answer the next question.
In the diagram, solid arrows reflect real flows and broken arrows are monetary flows. Flow (8) might represent
A. the services of firefighters. B. automobile purchases by the state of Maine. C. subsidies to farmers. D. personal income taxes.
If a monopolistically competitive firm's demand curve is shifting left, it will stop shifting only when:
A. the firm raises its price. B. firms stop leaving the industry. C. the firm lowers its price. D. firms stop entering the industry.
Refer to the above table. All real GDP numbers are expressed in terms of the purchasing power of dollars in
A. 2017. B. 2018. C. 2019. D. 2020.
More complementary resources would ____________ the productivity and the marginal revenue product of labor.
A. tend to raise B. tend to lower C. not effect