Assume that the adoption of a new technology costing 8 per year ...

[nevelica]

Assume that the adoption of a new technology costing 8 per year lowers the marginal cost of producing Good X from 7 to 3 . The firm will adopt the new technology if it expects annual profit to increase from 14 to 18.
  Indicate whether the statement is true or false

Question 2

The force that leads to zero economic profits for monopolistically competitive firms in the long run is:
 a. excess capacity.
 b. price wars among firms.
  c. new entry.
 d. excessive advertising.

[sarajane1989]

Answer to Question 1

F

Answer to Question 2

c