If the firms in a monopolistically competitive market are earning short-run economic profits, then
a. each existing firm will increase output in the long run as its marginal revenue curve shifts rightward
b. each firm will experience an increase in the demand for its output in the long run
c. each firm's profit will drop to normal in the long run as its demand curve shifts leftward due to entry of new firms
d. barriers to entry will enable them to earn economic profits in the long run
e. decreased demand for a key input will reduce that input's price in the long run and lower each firm's average total cost curve
C
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Saving equals ________
A. income minus consumption expenditure minus net taxes B. income minus net taxes C. total income minus total expenditure D. net taxes minus government expenditure
For the monopsonist, marginal expenditure is greater than the wage rate because the monopsonist
A) pays a wage higher than that paid in a competitive market. B) chooses the perfectly competitive quantity of labor. C) must increase the wage to all units of labor to attract more units of labor. D) must take the wage as given by the market.