Refer to the information provided in Figure 15.5 below to answer the question(s) that follow.  Figure 15.5 Refer to Figure 15.5. Assume the Custom Sweater Shop has fixed costs of $275 and is a monopolistically competitive firm. If this firm is attempting to maximize profits, the firm's profit is

Which of the following scenarios would make monetary policy the most difficult to address?

A) A worldwide spike in oil prices resulting in higher production costs. B) A rise in unemployment that causes consumers to spend less. C) A reduction in business confidence that leads to a reduction in investments D) A booming housing market that causes inflation to rise.

Why do short-run profits in a perfectly competitive industry tend to disappear over time?