This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Why don't some firms in monopolistic competition earn losses in the long run? A) The firms have ... (Read 104 times)

jman1234

  • Hero Member
  • *****
  • Posts: 560
on: Jul 1, 2018
Why don't some firms in monopolistic competition earn losses in the long run?
 
  A) The firms have enough monopoly power to ensure they always earn profits.
  B) Free entry allows enough firms to remain in the market and maintain the critical mass of firms required to attract customers.
  C) Free exit implies that any unprofitable firms leave the market in the long run.
  D) In the long run, firms will build enough brand loyalty among customers to ensure a profitable level of sales.

Question 2

Suppose a competitive market is in equilibrium at price P' and quantity Q'. If the demand curve becomes less elastic, but the same price-quantity equilibrium is maintained, what happens to consumer and producer surplus?
 
  A) Both PS and CS increase
  B) CS increases and PS decreases
  C) CS increases and PS remains the same
  D) Both CS and PS decrease


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

welcom1000

  • Sr. Member
  • ****
  • Posts: 298
Reply #1 on: Jul 1, 2018
Answer to Question 1

C

Answer to Question 2

C


jman1234

  • Member
  • Posts: 560
Reply 2 on: Jul 1, 2018
Gracias!

Liddy

  • Member
  • Posts: 342
Reply 3 on: Yesterday
Great answer, keep it coming :)

« previous next »
 

Did you know?

Once thought to have neurofibromatosis, Joseph Merrick (also known as "the elephant man") is now, in retrospect, thought by clinical experts to have had Proteus syndrome. This endocrine disease causes continued and abnormal growth of the bones, muscles, skin, and so on and can become completely debilitating with severe deformities occurring anywhere on the body.

Did you know?

Prostaglandins were first isolated from human semen in Sweden in the 1930s. They were so named because the researcher thought that they came from the prostate gland. In fact, prostaglandins exist and are synthesized in almost every cell of the body.

Did you know?

All adults should have their cholesterol levels checked once every 5 years. During 2009–2010, 69.4% of Americans age 20 and older reported having their cholesterol checked within the last five years.

Did you know?

Stroke kills people from all ethnic backgrounds, but the people at highest risk for fatal strokes are: black men, black women, Asian men, white men, and white women.

Did you know?

Many people have small pouches in their colons that bulge outward through weak spots. Each pouch is called a diverticulum. About 10% of Americans older than age 40 years have diverticulosis, which, when the pouches become infected or inflamed, is called diverticulitis. The main cause of diverticular disease is a low-fiber diet.

Competition can be (a) direct, or (b) indirect interaction among individuals of the same or differen Competition can be (a) direct, or (b) indirect interaction among individuals of the same or differen
Features found in a long bone. Features found in a long bone.
Common Types of Losses Common Types of Losses
Biking competition in the park Biking competition in the park
Types of Long-Term Memories Types of Long-Term Memories
Demographic transition model for changes in population growth rates and sizes, correlated with long- Demographic transition model for changes in population growth rates and sizes, correlated with long-
Video: Appendicitis Animation

For a complete list of videos, visit our video library