Which of the following happens when new firms enter a monopolistically competitive market structure?
A) The existing firms face higher demand.
B) The existing firms face relatively inelastic demand curves.
C) The existing firms earn higher profits.
D) The existing firms earn lower profits.
D
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Protecting air quality by establishing identical low limits on noxious discharges for all firms is a questionable policy because
A) a little pollution from many sources adds up to excessive pollution. B) by allowing firms to pollute at all it sacrifices the community's interest to private profit. C) it does not allow high-cost air polluters to exceed the air pollution limits. D) it tolerates preventable air pollution. E) no one knows the possible side effects of the discharges.
In the above figure, when price is below E, this firm should
A) lower prices. B) continue to operate as-is. C) attempt to lower ATC and to raise AVC. D) shut down.
Purchases of stocks and bonds are examples of investment spending
a. True b. False
Price discrimination allows the firm to
a. segment the market and thereby capture consumer surplus b. create excess demand which will force price upward c. shift the equilibrium price to eliminate price competition among discriminating buyers d. behave like a monopolist e. select a small set from among its customers in order to charge the highest price possible