If firms in a monopolistically competitive industry are operating with economic losses, over time we would see
A) firms alter their advertising rates until they made at least normal profits.
B) some firms exiting the industry, causing the market supply curve to shift to the left, raising price.
C) some firms exiting the industry, causing the demand curves of the remaining firms to shift to the right.
D) the firms working together to increase price and everyone's profitability.
C
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In general, a nation can enjoy a higher standard of living by ________ than by being self-sufficient.
A. specialization and trading B. taxing imported goods C. increasing its versatility D. avoiding trade with other nations
Julia can fix a meal in 1 hour, and her opportunity cost of one hour is $50 . Jacque can fix the same kind of meal in 2 hours, and his opportunity cost of one hour is $20 . Will both Julia and Jacque be better off if she pays him $45 per meal to fix her meals? Explain
If this is a closed economy, the number of TVs exchanged will be ________.
A. 120,000 B. 60,000 C. 30,000 D. 90,000
Direct shipment of wine to individuals is illegal. Some wineries want the law revoked. They argue that the ability to ship directly to consumers helps small wineries and that shipping bans unfairly protect home-state wineries, raising prices to consumers. Others argue that the bans allow states to collect tax revenues and to keep wine from being sold to minors. What would most economists say about whether this ban should stay or be eliminated?
A. Because there would be people harmed, lifting the ban would not be Pareto optimal. Therefore, eliminating the ban is a bad policy. B. There are benefits to lifting the ban but also costs, and unless we know these costs and benefits, we cannot decide. C. Lifting the ban would make taxes less equitable. Therefore, the ban should remain. D. Economists would argue that competition is good and the ban prevents competition. Therefore, the ban should be lifted.