The Model of Monopolistic Competition Can Characterize the Market for Plumbing

question 199

Multiple Choice

The model of monopolistic competition can characterize the market for plumbing services in a city.This market is initially in long-run equilibrium, but then there is an increase in demand for plumbing services.We expect that in the long run:

• A)firms will leave the plumbing market.
• B)there will be a short-run increase in the number of firms, but then the number will return to the original level.
• C)new firms will enter the plumbing market.
• D)firms will shut down, but they will not leave the industry.

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Definitions:

Activation

Involves the arousal of the brain or body to a state of increased responsiveness to stimuli.

Vigor

Physical strength, health, and energy.

Nomothetic

An approach in psychology that seeks to study and identify general laws and principles that can be applied broadly across individuals.

Idiographic

An approach focusing on the unique aspects of individuals or phenomena, emphasizing the subjective and qualitative analysis.