The incentive for new firms to enter into a perfectly competitive market is primarily the:
A) large number of existing firms in the market.
B) positive profits earned by the existing firms in the market.
C) high level of government intervention in the market.
D) large number of buyers in the market.
B
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What are constant returns to scale?
a. cost disadvantages in an output range where LRATC rises as output expands b. per-unit cost reductions in an output range where LRATC falls as output increases c. returns in an output range where LRATC does not change as output varies d. cost savings that occur in an output range where LRATC falls due to low output
The payoff matrix below shows the daily profit for two firms, Row Restaurant and Column Cafe, for two different strategies, publishing coupons in the student paper and not publishing coupons in the student paper. 
If Row Restaurant publishes coupons, Column Cafe would earn the highest profit if it:
A. only offered coupons half of the time. B. also published coupons. C. did not publish coupons. D. chooses either strategy because Column Cafe will have the same profit in either case.