Asked by Jacqueline Camacho on May 30, 2024
Verified
(Figure: The Market for Gas Stations) Use Figure: The Market for Gas Stations.The figure shows curves facing a typical gas station in a large town.The market is characterized by many firms,differentiated products,easy entry,and easy exit.If the gas station here is typical,prices charged by firms in the market are likely to:
A) fall in the long run.
B) rise in the long run.
C) remain unchanged.
D) rise dramatically in the long run.
Prices Charged
The amount of money demanded by a business in exchange for its goods or services.
Long Run
A period during which all factors of production and costs are variable, allowing firms to adjust to desired levels.
Gas Station
A retail establishment that sells fuel and often other goods or services to motor vehicle customers.
- Specify the conditions under which long-run equilibrium is reached in a monopolistically competitive environment, particularly how prices equilibrate with average total cost.
- Evaluate the consequences of heightened demand in monopolistically competitive markets and anticipate the market evolution.
Verified Answer
Learning Objectives
- Specify the conditions under which long-run equilibrium is reached in a monopolistically competitive environment, particularly how prices equilibrate with average total cost.
- Evaluate the consequences of heightened demand in monopolistically competitive markets and anticipate the market evolution.
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