For which product is the income elasticity of demand most likely to be positive?

Consider a price searcher industry with high barriers to entry. In the short run, total revenues of the monopoly exceeds total costs. What will happen in the long run?

A. Nothing, because would-be rival firms are prohibited from entering the industry or find the start-up costs too costly to warrant the entrepreneurial risk to enter the industry. B. Many firms will enter the market and each firm will eventually operate at a loss. C. firm will be making just enough to cover per unit costs. D. Additional firms will enter the market, but the price will remain the same because the existing firms will not allow price to decrease.

The ________ real GDP, the ________

A) larger; larger the demand for money B) larger; smaller the demand for money C) larger; larger the supply of money D) smaller; larger the demand for money E) larger; smaller the supply of money