Due to free entry and exit in monopolistic competition, in the long run price must be equal to

The circular flow model shows the

A) distribution of income and consumption goods across income levels. B) combinations of the factors of production needed to produce goods and services. C) flow of expenditure and incomes that arise from the households', firms', and governments' decisions. D) flow of natural resources from firms to the private market to government and back to firms. E) distribution of income to the different factors of production.

If an increase in income leads to a decrease in the demand for salami, then salami is

A) a necessity. B) a neutral good. C) a normal good. D) an inferior good.