Use the Following to Answer Questions

question 168

Multiple Choice

Use the following to answer questions :
Figure: The Market for Gas Stations
-General Snacks is a typical firm in a market characterized by the model of monopolistic competition.Initially,the market is 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:

Production Cost

The total expense incurred in the manufacturing of a product or providing a service, including raw materials, labor, and overhead costs.

Optimal Cost

The lowest possible cost at which a particular set of goods or services can be produced or acquired, taking into consideration factors such as efficiency and resource allocation.

Double-subscripted Variables

Variables in mathematical modeling that are indexed by two subscripts, often used to represent elements in matrices or two-dimensional arrays.