In a monopolistically competitive market, the lower the firms' fixed costs,
A) the higher the deadweight loss.
B) the less firms are active in equilibrium.
C) the more firms are active in the equilibrium.
D) the higher the prices charged.
Question 2
In the first years of a professional athlete's career, the athlete is under reserve, which means that he or she cannot negotiate with other teams. After a specified amount of time, the player can become a free agent. This implies that, everything else equal,
A) the player's salary is probably higher as a free agent than as a reserve player.
B) the player's salary is probably lower as a free agent than as a reserve player.
C) the player's salary is probably the same as a free agent and as a reserve player.
D) the free agent status is not granted to every player.
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