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Author Question: If firms monopolistically competitive firms are making an economic profit, as new firms enter the ... (Read 289 times)

kellyjaisingh

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on: Jun 29, 2018
If firms monopolistically competitive firms are making an economic profit, as new firms enter the market, each of the existing firms' demand curve shifts ________, the marginal curve shifts ________, and the profit-maximizing quantity ________.
 
  A) leftward; leftward; decreases
  B) rightward; leftward; increases
  C) leftward; rightward; decreases
  D) leftward; leftward; increases

Question 2

When the production of a good creates an external cost, in order for taxes to be effective in achieving the efficient allocation of resources, the tax must be set equal to the
 
  A) marginal private cost.
  B) marginal external cost.
  C) marginal social cost.
  D) marginal benefit of polluting.


ynlevi

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Reply #1 on: Jun 29, 2018
Answer to Question 1

A

Answer to Question 2

B


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kellyjaisingh

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Reply #2 on: Jun 29, 2018
Thank you :)


ynlevi

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Reply #3 on: Jun 29, 2018
Happy to help you


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