Entry by new firms into a monopolistically competitive market
a. creates additional consumer surplus.
b. imposes a positive externality on existing firms.
c. leads to the same externalities that are observed when new firms enter a perfectly competitive market.
d. increases the demand for existing firms' products.
a
You might also like to view...
Which of the following is not a reason why the prospects for the further expansion of developing country commodity exports are likely to be limited?
(a) Low income elasticities for these products. (b) Low likelihood of development of further synthetic substitutes. (c) Continued agricultural protection despite trade agreements. (d) Declining terms of trade.
Labor productivity can be increased with
A) education and training of the workforce. B) an increase in capital goods used. C) improvements in management. D) all of the above
The purchase of a firm in another country that involves the taking of management responsibility is referred to as _____
a. portfolio investment b. foreign direct investment c. purchasing power parity d. open account trading
The stability of cartel prices is challenged because
A. cartels never exist. B. though they increase profits, they are vulnerable to those that seek to make more profit by breaking the agreements that generated them. C. though they increase profits, they are vulnerable to egalitarian interests. D. they never increase the profitability of their members.