If a profit-maximizing monopolistic competitor earns positive economic profits in the short run:
a. demand will become increasingly inelastic as new firms enter.
b. the firm should increase its output as new firms enter
c. there must be barriers to entry into the industry.
d. new firms will be attracted to the industry.
e. both b. and d. are correct.
d
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Which of the following four firms would most likely be part of a perfectly competitive market?
A) Village Pizza sells NY style pizza and hard-to-find microbrews in a college town. B) The WaveHouse is the only place in San Diego where you can ride an indoor 10 foot wave. C) Mark sells the tomatoes he grew in his backyard at the local farmers market. D) Amara Massage specializes in pre- and post-natal massage.
Economics seeks to use only positive analysis to
A) provide a value-free analysis. B) seek the best answer. C) predict how people should act. D) provide normative values.
In general we note that inflation:
A. hurts everyone in the economy whenever it occurs. B. hurts everyone in the economy the same. C. always decreases purchasing power. D. has very real costs associated with it.
The issuance of debt involves some intergenerational transfer of income; long after the debt is issued, a new generation of taxpayers must make interest payments on the debt
a. True b. False Indicate whether the statement is true or false