Assuming that the total market size remains constant, a monopolistically competitive firm earning profits in the short run will find the demand for its product decreasing in the long run because
A) some of its customers have switched to purchasing the products of new entrants in the market.
B) as the firm raises its price in the long run, it will lose some customers to new entrants in the market.
C) its costs of production rises.
D) new entrants into the market are more likely to have cutting edge products.
A
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Which of the following is likely to happen due to a contractionary monetary policy?
A) An increase in the inflation rate B) An increase in labor supply C) An increase in the federal funds rate D) An increase in labor demand
Explain the difference between a nominal value and a real value
What will be an ideal response?
Keynesians believe
A) in laissez-faire. B) that equilibrium may exist at less than full employment. C) in the use of fiscal policy to stabilize the economy. D) b and c E) all of the above
The government is likely to block a merger if:
A. the firms remaining would all earn economic profit. B. it can be established that the merger would substantially reduce competition. C. the firms remaining would be able to charge a price above marginal cost. D. the firms that are merging are producing different products.