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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FMV

Fair Market Value; the price an asset would sell for on the open market under current conditions.

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The amount used in determining capital gain or loss for the donor, typically the cost basis adjusted for various factors like improvements or depreciation.

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