If short-run economic profits are greater than zero for firms in a monopolistically competitive market, in the long run we expect:
A. entry barriers to prevent competing firms from entering this market.
B. the demand curve for firms in the market to shift to the right.
C. competing firms to enter the market and sell similar products.
D. profits to increase.
Answer: C
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If the price of monthly satellite TV service increases from $40 to $50, the percentage change is
A) 5 percent. B) 20 percent. C) 25 percent. D) 45 percent.
Greater labor force participation for households at higher real wage rate is one reason that
A) the demand for labor curve is upward sloping. B) the demand for labor curve is downward sloping. C) the supply of labor curve is upward sloping. D) the supply of labor curve is downward sloping.
Refer to Figure 7-5. With insurance and a third-party payer system, what price do doctors receive for medical services?
A) $40 B) $55 C) $65 D) > $65
It is argued that the market will
A. not produce a nonexcludable public good. B. produce the socially optimal output of a nonexcludable public good. C. produce too much of a nonexcludable public good. D. produce a nonexcludable public good if marginal social benefits are equal to marginal private benefits. E. b and d