An industry with a large number of firms, differentiated products, and free entry and exit is called

Suppose that the market for large, 64-ounce soft drinks in the town of Pudgyville is characterized by a typical, downward-sloping, linear demand curve and a typical, upward-sloping, linear supply curve. The market is initially in equilibrium with 1,000 soft drinks sold per day. The newly-elected Mayor of Pudgyville wants to tax 64-ounce soft drinks. She is considering either a $0.10 tax or a

$0.30 tax. Her chief economic advisor estimates that the number of soft drinks sold after a $0.10 tax will be 900 and after a $0.30 tax will be 500 . Which tax is better? a. The $0.10 tax is better because it raises more revenue and creates a lower deadweight loss than the $0.30 tax. b. The $0.30 tax is better because it raises more revenue and creates a lower deadweight loss than the $0.10 tax. c. It is not clear which tax is better because although the $0.30 tax raises more tax revenues, it creates a larger deadweight loss than the $0.10 tax. d. It is not clear which tax is better because although the $0.10 tax raises more tax revenues, it creates a larger deadweight loss than the $0.30 tax.

Over the past several decades, U.S. firms have faced more competition from overseas firms. Does this have any impact on the market power of U.S. oligopoly firms?

A) no, because domestic firms in oligopoly markets are always so dominant that overseas producers have little or no impact on those markets B) no, because the United States government has effectively blocked all imports that might compete with domestic firms in oligopoly industries C) Yes, competition from overseas firms can substantially limit domestic firms' market power. D) There is no way to know.