Consider a monopoly who posts an economic profit of 10,000,000. All else equal, this monopolist should expect
A) entry into its market, prices to fall, profits to fall.
B) no entry into its market, prices to remain the same, profits to remain the same.
C) exit from its market, prices to rise, profits to rise.
D) entry into its market, the need to increase price, profits to remain the same.
Question 2
In a competitive market, if buyers did not know all the prices charged by the many firms,
A) all firms still face horizontal demand curves.
B) firms sell a differentiated product.
C) demand curves can be downward sloping for some or all firms.
D) the number of firms will most likely decrease.
