In Figure 8.10, airline Fly Smart is initially a secure monopoly between two cities X and Y at point M, serving 300 passengers per day at the profit-maximizing price of $300 per ticket. Suppose that Fly Smart discovers that a second airline is contemplating entering the market. If the minimum market entry quantity is 130 passengers per day, what price should Smart Fly charge to secure the entry-deterring quantity?

What happens to the demand for loanable funds curve when the economy enters a recession?

A) The demand for loanable funds curve shifts leftward because wealth decreases. B) The demand for loanable funds curve shifts leftward because expected profit falls. C) The demand for loanable funds curve shifts leftward because the real interest rate falls. D) The demand for loanable funds curve shifts rightward because the real interest rate falls. E) The demand for loanable funds curve shifts rightward because expected profit falls.

Absolute advantage governs the potential for gains from trade

a. True b. False Indicate whether the statement is true or false