Picture the graph. When new firms enter a monopolistically competitive market, the result is a(n)
a. shift to the left of the existing firms' demand curves
b. shift to the right of the existing firms' demand curves
c. more inelastic set of demand curves for the existing firms
d. decrease in market output (the sum of all firms' output)
e. increase in price and decrease in firm's economic profit
A
Economics
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Thinking of a Gap store as a production plant, explain why Gap is making a decision to reduce the size of its stores. Is Gap's decision a long-run decision or a short-run decision?
What will be an ideal response?
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Which of the following could not create barriers to entry?
a. Negative network externalities b. Ownership of essential inputs c. Economies of scale d. All of the above could create barriers to entry
Economics