When the existing firms in a monopolistically competitive industry earn above-normal profit:
a. new firms enter into the market, and entry continues until firms earn normal profit.
b. new firms have no incentive to enter the market.
c. new firms have an incentive to enter the market but are legally barred from doing so.
d. they increase their production and lower the price level.
e. their cost structure automatically changes, eliminating the additional profit.
a
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Refer to the table above. What is the shortage in the market when the price of a notebook is $1?
A) 0 units B) 10 units C) 14 units D) 16 units
Refer to Figure 7-5. The efficient quantity of medical services is
A) 400. B) 800. C) 1,200. D) > 1,200.
A firm will exit a competitive market when
A) costs force the marginal cost curve to shift to the left. B) the long-run profit would be negative. C) it can earn only earn a zero long-run profit. D) Both B and C.
If the interest rate is 10 percent and a business pays $100,000 for a lease on a factory, the explicit costs are
A) $110,000. B) $10,000. C) $100,000. D) $90,000.