When new firms choose to enter monopolistically competitive markets:
a. there must be little diversity of products in the market
b. they are guaranteed economic profits upon entry.
c. some firms in the market must be making economic profits.
d. the demand curve faced by an established firm will shift to the right as a result.
c
You might also like to view...
If the people of Redland are expecting the central bank to conduct an expansionary monetary policy for several years, how will the long-run real interest rate in Redland be affected?
What will be an ideal response?
The expenditure multiplier is equal to the change in ________ divided by the change in ________
A) dependent expenditure; autonomous expenditure B) autonomous expenditure; equilibrium expenditure C) the price level; real GDP D) equilibrium expenditure; autonomous expenditure E) real GDP; equilibrium expenditure
Refer to Scenario 17-1. Following the passage of comparable worth legislation, Unity College responds by placing salaries at $65,000. Which of the following is the result of the legislation?
A) The supply of English professors increases and the supply of business professors decreases. B) There will be a surplus in the market for English professors and the market for business professors will not be affected. C) There will be a surplus in the market for English professors and a shortage in the market for business professors. D) The demand for English professors decreases and the demand for business professors increases.
ABC Light Bulbs has a monopoly on a new style of LED lighting. Right now, they sell 5 million bulbs at a unit price of $10. If they lower their price to $8, they will sell 7 million units. What is the price effect in this scenario?
a. ABC is unable to influence the price of its products if output exceeds 7 million bulbs. b. ABC earns an additional $18 for every bulb it sells over 5 million. c. ABC loses $10 million in revenue by selling at a lower price to its original customers. d. ABC gains $6 million in revenue by selling more bulbs to new customers.