Under the model of monopolistic competition, a(an) ________ in the number of firms in the industry will cause ________ to ________
A) increase; average price; decrease
B) increase; average price; increase
C) increase; average cost; decrease
D) decrease; markup; decrease
E) increase; marginal cost; decrease
A
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An illegal market in which the price exceeds a legally imposed price ceiling is called a
A) shortage market. B) surplus market. C) black market. D) fair market. E) subsidized market.
Use the following graphs for a perfectly competitive market in the short run to answer the next question.
What will happen in the long run to market supply and the equilibrium price of the product?
A. Market supply will increase and equilibrium price will increase. B. Market supply will decrease and equilibrium price will decrease. C. Market supply will decrease and equilibrium price will increase. D. Market supply will increase and equilibrium price will decrease.