When a second firm enters a monopolist's market,
A. market price will rise.
B. the quantity produced by the first firm will increase.
C. the first firm's profits will decrease.
D. All of these will occur.
Answer: C
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Refer to the figure above. What is the quantity effect of a price increase from $3 to $5?
A) $200 B) $600 C) $800 D) $1,000
Why might firms pay wages that are above the equilibrium wage in a market?
A) to reduce the unemployment rate B) to encourage workers to form labor unions C) to increase the productivity of their workers D) to reduce profit
Recently, many cities have attempted to pass laws taxing the sale of sugary drinks such as soda pop. If one of these laws passes, we would expect
A) the supply curve for soda pop to shift to the right. B) the supply curve for soda pop to become more vertical. C) the demand curve for soda pop to shift to the right. D) the demand curve for soda pop to shift to the left.
In a long-run monopolistically competitive equilibrium
A) P = ATC, and ATC is not at its minimum value. B) P = ATC, and ATC is at its minimum value. C) P > ATC, and ATC is at its minimum value. D) P > ATC, and ATC is not at its minimum value.