Use the Following Scenario to Answer the Following Questions

question 56

Multiple Choice

Use the following scenario to answer the following questions:
In 2011,three firms were selling cellular phone service for a price of $40 per month in Pittsburgh,Pennsylvania.Each firm serviced 100 cell phone customers; thus,all firms together serviced a total of 300 customers.In 2012,five firms were selling cellular phone service for a price of $30 per month.Each firm serviced 70 cell phone customers; thus,all firms together serviced a total of 350 customers.Assume marginal cost is $0 (zero) for all firms and thus total revenue is equal to total profit.
-Due to the entrance of two firms in 2012,total monthly profits for all firms in the market decreased by $3,000 due to the ________ effect and increased by $1,500 due to the ________ effect.

• A)
• Price; output
• B) output; price
• C) price; price
• D) output; output
• E) competitive; noncompetitive

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Definitions:

Indian Wars

The Indian Wars refer to a series of conflicts between European settlers and American Indian tribes in North America from the earliest colonial times through the late 19th century over land, resources, and cultural differences.

Southeast

The Southeast refers to the southeastern region of the United States, characterized by a subtropical climate, lush vegetation, and a rich history influenced by Indigenous, African, and European cultures.

James Oglethorpe

A British general and philanthropist, best known for founding the colony of Georgia as a place for debtors and the poor of Britain to start anew.

Georgia

A state located in the southeastern region of the United States, known for its diverse geography from beaches to mountains and its significant history dating back to the colonial era.