Explain how losses of existing firms are reduced as some firms exit a monopolistically competitive industry due to economic losses
As some firms exit, it means fewer firms in the market, which increases the demand for the remaining firms' product, shifting their demand curves to the right. When firms exit not only will the firm's demand curve move outward but it also becomes relatively more inelastic due to each firm's products having fewer substitutes. The higher demand results in smaller losses for the existing firms until all losses finally disappear where the ATC curve is tangent to the demand curve.
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Suppose that Mel (who is 27 ) is not working, but looked for a job as recently as 2 months ago. Mel would like a job and he is available for work. He is considered
A) unemployed. B) a member of the labor force and unemployed. C) a member of the labor force, but not unemployed. D) a member of the working-age population E) a marginally attached worker.
GDP counts only final goods and services because this
A) method avoids including any goods that are produced this year and sold next year. B) method avoids double counting of goods going through several stages of production. C) amount can be more easily determined in the marketplace. D) method avoids understating the value of GDP produced during a given year.
As John's income has increased, he has purchased fewer hamburgers. Hamburgers are
A) a normal good for John. B) an inferior good for John. C) not following the law of demand. D) leading to a rightward shift in John's demand curve for hamburgers.
Research suggests that taller workers tend to earn more income than shorter workers. What does this suggest about the relationship between workers' height and their productivity?