Why are firms in monopolistic competition unable to earn an economic profit in the long run?
What will be an ideal response?
While firms in monopolistic competition do not produce an identical product, such as perfectly competitive firms, they face the same problem other competitive firms face: freedom of entry. When firms in monopolistic competition are earning an economic profit, other firms will enter the market. Entry decreases the demand for the products of the existing firms and thereby decreases their economic profit. Firms will continue to enter the market until the economic profit equals zero.
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The primary responsibilities of the ________ are the assessment and collection of all duties, taxes, and fees on imported merchandise, the enforcement of customs and related laws, and the administration of certain navigation laws and treaties.
A) U.S. Customs and Border Protection B) U.S. Secret Service C) Internal Revenue Service D) Food and Drug Administration
Exhibit 11-6Use the table below to answer the following question(s). Nominal GDP GDP Year(billions) deflator Year 1 600 100.0 Year 21,000 133.3 Refer to Exhibit 11-6. Between Year 1 and Year 2, the general level of prices increased by approximately:
A. 16.7 percent. B. 33.3 percent. C. 66.7 percent. D. 133.3 percent.
The benefit of a price ceiling to ________ is ________.
A. producers; the selling price of the product is above the equilibrium price B. producers; the ceiling creates excess demand C. consumers; the ceiling creates excess supply D. consumers; the selling price of the product is below the equilibrium price
The wage rate will increase and firms will decrease employment to the point where MRP equals the new wage rate if
A. the supply of labor decreases. B. the supply of labor increases. C. the demand for labor decreases. D. the demand for labor increases.