99. The market for plumbing services in a city can be characterized by the model
ID: 1251962 • Letter: 9
Question
99. The market for plumbing services in a city can be characterized by the model of monopolistic competition. Suppose that the market is initially in long-run equilibrium, and then there is an increase in demand for plumbing services. We expect that in the long run the economic profits of typical firms in the industry will be:A) typical of those earned by monopoly firms.
B) negative.
C) zero.
D) positive but less than the level typically earned by monopoly firms.
104. In oligopoly, a firm must realize:
A) that what it does affects the other firms in the industry.
B) that it must pursue policies always remembering there will be a reaction to those policies by other firms in the industry.
C) that it is in an industry in which one major firm may dominate and the firm will need to judge its actions accordingly.
D) all of the above.
Explanation / Answer
99.) C 104.) D
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