If monopolistically competitive firms in an industry are making an economic profit, then:
A. firms will exit the industry and product demand will decrease for the firms that remain.
B. firms will exit the industry and product demand will increase for the firms that remain.
C. new firms will enter the industry and product demand will increase for the existing firms.
D. new firms will enter the industry and product demand will decrease for the existing firms.
Answer: D
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How does a recession in Asia affect U.S. aggregate demand and the U.S. aggregate demand curve?
What will be an ideal response?
Suppose player 1 potentially moves twice in a sequential game, each time choosing from one of two possible actions -- "Left" or "Right". His first move is at the beginning of the game. He gets to move a second time if he moved "Left" the first time and after observing one of two possible actions by player 2 ("Up" or "Down"). But if he moves "Right" in the first stage, he gets no further moves and the game ends after player 2 chooses one of two actions ("Up" or "Down"). Draw the game tree and list all possible strategies for players 1 and 2.
What will be an ideal response?
Firms are more likely to find themselves in a prisoner's dilemma in sequential games as opposed to simultaneous games
Indicate whether the statement is true or false
One way to allocate 1,000 (stadium capacity) football tickets priced at $20 to 2,000 would-be buyers is to
a. put the tickets on sale for half price b. increase market efficiency c. make the tickets available to more people at the low price d. use a price ceiling to ensure that the market will remain in equilibrium e. implement a ration coupon system