Answer to Question #184996 in Microeconomics for James

Question

QUESTION 13

Positive economic profits being earned by firms in a monopolistically competitive market:

1. Attract competing firms into the industry, driving the original firms’ demand up.
2. Attract competing firms into the industry, driving the original firms’ demand down.
3. Dissuade competing firms from entering the market.
4. Will have no effect on other firms’ entry into or exit from the market.
5. Will have no effect on firms producing complementary products.

QUESTION 14

The process of new entry into a monopolistically competitive market will:

1. Ensure that every want is satisfied.
2. Increase economic profits for all involved.
3. Drive down economic profits to zero in the long run.
4. Drive down economic profits to zero only in the short run.
5. Drive downtown for a burger. 

QUESTION 15

Monopolistic competition:

1. Will reach a productively efficient outcome.
2. Will not be productively efficient.
3. Is nothing like the real world.
4. All of the above.
5. None of the above.

Answer 1

13. 2

14. 3

15. 1