What entices a second firm to enter a market that was previously a single price monopoly?
What will be an ideal response?
A firm will enter a market when the incumbent monopolist is earning positive profits in the short run and in the long run. This occurs when the price that the firm charges is higher than the ATC at the profit-maximizing quantity.
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Brokers, in contrast to security dealers
A) hold inventories of securities. B) make their income through commissions. C) make their living on the spread between the bid price and the asked price. D) buy and sell securities at given prices.
In Figure 5.1, during the period between the early 1970s and 1980, real GDP grew at a faster rate than nominal GDP. This is an indication that
A. Average price levels increased. B. Production increased at a slower rate than average price increased. C. Production increased at a faster rate than average price increased. D. Average price levels decreased.