Refer to Figure 13.1. All else equal, a decrease in income taxes would best be represented by a movement from
A) point A to point B.
B) point B to point A.
C) point B to point C.
D) point C to point B.
B
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Network externalities
A) prevent the dominance of a market by one firm. B) are created when celebrity endorsements of products lead to a surge in the demand for those products. C) exist when the usefulness of a product increases with the number of consumers who use it. D) can only exist when there are economies of scale.
These are the cost and revenue curves associated with a monopolistically competitive firm.
According to the graph shown, the monopolistically competitive firm will charge a price:
A. P3 in the long run, and earn zero profits. B. P2 in the short run, and earn positive profits. C. P2 in the long run, and earn zero profits. D. P3 in the short run, and earn positive profits.