Which of the following does not happen when new firms enter a monopolistically competitive industry?
a. The demand curve for each of the existing firms will fall
b. The demand curve for each of the existing firms will move inward.
c. The demand curve for each of the existing firms will becomes relatively more elastic.
d. The demand curve for each of the existing firms will shift to the right.
d
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The business cycle refers to
A) fluctuations in the level of real GDP around potential GDP. B) changes in the level of nominal GDP. C) changes in the level of the stock market. D) changes in the level of employment.
Explain the factors that determine the incidence of the payroll tax. Illustrate your answer using graphs
In the United States, who bears most of the payroll tax employers or workers? Why? (Hint: draw two separate supply and demand curves for labor. Show one with a relatively elastic supply for labor and one with a relatively inelastic supply).