Which of the following is likely under free trade and monopolistic competition?
a. Domestic firms will always be provided cash subsidies.
b. Some domestic firms will shut down.
c. Consumers will not benefit at all from trade.
d. Foreign firms will sell the product at a higher price in the export market.
Ans: b. Some domestic firms will shut down.
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This graph represents the cost and revenue curves of a firm in a perfectly competitive market.
According to the graph shown, the long-run output decision for this firm is:
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