In the short run, a monopolistic competitor can
a. not earn an economic profit because of competition
b. use limit pricing to reduce competition
c. maximize profits by charging the highest price the market will bear
d. earn an economic profit
e. maximize profit by selecting the minimum efficient scale
D
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Suppose a local photographer increases his prices by 8 percent and quantity demanded decreases by the same percentage. This set of facts indicates that the demand for his services is
A) inelastic. B) elastic. C) unit elastic. D) perfectly elastic. E) perfectly inelastic.
Apple introduced its iPhone 3G in July 2008 and within a month sales had topped 3 million units. By April 2009, more than 25,000 apps for the iPhone 3G were available in the iTunes store, an indication that in a competitive market
A) entry into the market is restricted in the short run, but becomes easier in the long run. B) the ease at which a new firm can enter a competitive market is high. C) entry into the market is blocked. D) the ease at which a new firm can enter a competitive market is low.