Assuming That the Total Market Size Remains Constant, a Monopolistically

question 217

Multiple Choice

Assuming that the total market size remains constant, a monopolistically competitive firm earning profits in the short run will find the demand for its product decreasing in the long run because

• A)new entrants into the market are more likely to have cutting edge products.
• B)as the firm raises its price in the long run, it will lose some customers to new entrants in the market.
• C)some of its customers have switched to purchasing the products of new entrants in the market.
• D)its costs of production rises.

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Definitions:

Strike

A work stoppage caused by the mass refusal of employees to work, usually in protest against labor conditions, policies, or other employment issues.

Factory Inspectors

Officials responsible for examining production facilities to ensure they comply with labor laws, safety standards, and health regulations.

Petition

A formal written request, typically one signed by many people, appealing to authority with respect to a particular cause.

Multinational Corporation

A corporation operating in multiple countries, able to leverage global markets for production, distribution, and sales.