General Snacks Is a Typical Firm in a Market Characterized

question 215

Multiple Choice

General Snacks is a typical firm in a market characterized by the model of monopolistic competition.Initially,the market is initially in long-run equilibrium,and then there is an increase in the market demand for snacks.We expect that:

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

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Definitions:

Straight-Line Depreciation

A method of calculating the depreciation of an asset, where the asset's cost is reduced equally over its useful life.

Payback Period

The length of time it takes for an investment to generate enough cash flow to recover its original cost, a measure of investment risk.

Investment Project

A project that allocates capital with the aim of generating returns over time, often involving infrastructure, real estate, or other assets.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal annual increments.