Author Question: In the long run, the economic profits of Hoot's Chicken 'n' Ribs, a monopolistic competitor, are: ... (Read 119 times)

mydiamond · **on:** Jun 30, 2018

In the long run, the economic profits of Hoot's Chicken 'n' Ribs, a monopolistic competitor, are:
a. not eliminated, because competition is not perfect.
b. not eliminated, because the demand curve slopes downward.
c. eliminated due to firms entering the industry.
d. eliminated due to firms leaving the industry.
e. not eliminated, because firms cannot enter the industry.

Question 2

Sam quits his job as an airline pilot and opens his own pilot training school. He was earning 40,000 as a pilot. He withdraws 10,000 from his savings where he was earning 6 percent interest and uses the money in his new business. He uses a building he owns as a hanger and could rent it out for 5,000 per year. He rents a computer for 1,200, buys office supplies for 500, rents an airplane for 6,000 . pays 1,300 for fuel and maintenance, and hires one worker for 30,000 . Sam's total revenue from pilot training classes this year equaled 90,400 . Sam's explicit costs this year equals:
a. 84,400.
b. 39,000.
c. 55,000.
d. 45,600.
e. 40,000.