When a firm exits a monopolistically competitive market, the individual demand curves faced by all remaining firms in that market will
a. shift in a direction that is unpredictable without further information.
b. shift to the right.
c. shift to the left.
d. remain unchanged. It is the supply curve that will shift.
b
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The net loss of total surplus that results from the misallocation of resources is referred to as ______.
a. producer surplus b. consumer surplus c. subsidy gain d. deadweight loss
A direct relationship is expressed graphically as a:
A. positively sloped line or curve. B. negatively sloped line or curve. C. horizontal line. D. vertical line.
What is the value added by all the firms A–E from the production of a product as described below? What did each firm add separately in value and what does it total?
LeBron James, a prominent basketball player, is considering signing on for another two years with his current team. The team managers, however, face a salary cap of $90 million for their team and have already contracted players for a total of $75 million. James, used to earning $20 million a year, has been offered to play for $15 million this year and $27 million in his second year. The current interest rate is 6.5%. Should he agree to the contract?
What will be an ideal response?