What happens in the long run if firms in a monopolistically competitive industry are incurring economic losses? Explain
What will be an ideal response?
If firms in a monopolistically competitive industry are incurring economic losses, firms will exit the market. As firms exit, the demand curve facing each remaining firm begins to shift to the right. This process continues until the remaining firms are no longer incurring losses. The above is also true of perfectly competitive firms as well.
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Based on the table above which shows Chip's costs, if rice sells for $600 a ton, Chip
A) makes an economic profit and should stay open in the short run. B) makes an economic profit, but should shut down in the short run. C) incurs an economic loss, but should stay open in the short run. D) incurs an economic loss and should shut down in the short run.
Which of the following is most likely to result from a stronger dollar?
A) U.S. goods exported aboard will cost less in foreign countries, and so foreigners will buy more of them. B) U.S. goods exported aboard will cost more in foreign countries and so foreigners will buy more of them. C) U.S. goods exported abroad will cost more in foreign countries, and so foreigners will buy fewer of them. D) Americans will purchase fewer foreign goods.