Economic surplus is another term for which of the following?

Assume the firms in a monopolistically competitive industry initially are earning positive economic profits. Which of the following will not occur over time?

A) The firms' economic profits will be reduced. B) New firms will enter. C) Demand for the existing firms' output will become more inelastic. D) The number of substitutes available in the industry will increase.

The market for bagels contains two firms: BagelWorld (BW) and Bagels'R'Us (BRU). The owners of the two firms decide to fix the price of bagels. The table below shows how each firm's profit (in dollars) depends on whether they abide by the agreement or cheat on the agreement. Suppose the game above is repeated every day, and both firms adopt the following strategy: cooperate on the first day, then if the other firm cheats, cheat the next day, and if the other firm abides, abide the next day. This type of strategy is likely to increase the probability that:

A. Bagel World cheats. B. both firms cheat. C. Bagels'R'Us cheats. D. both firms abide.