Economics questions HELP PLEASE!!!!>>>????

Question

Question 1.

Suppose that the market for haircuts in a community is perfectly competitive and that the market is intially in long-run equilibrium. Subsequently, an increase in population increases the demand for haircuts. In the short run, we expect that the typical firm is likely to begin:?

A.Earning an economic profit.

B.Incurring an economic loss.

C.Experiencing no change in its economic profit.

D.experiencing neither an economic profit nor an economic loss.

Question 2.

A decrease in production costs for firms in a perfectly competitive market will cause a(n):?

A.Permanent increase in price

B.Economic profit for firms in the short run.

C.increase in demand.

D.increase in firms' marginal revenue.

Question 3.

Due to the existence of a large number of similar, but not identical, substitutes in most communities, the market for finacial planners is best considered:?

A. a monopoly

B. an oligopoly

C. perfect competition

D. monopolistic competition

Question 4.

The main characteristic that distinguishes monopolistic competition competition from perfect competition is:

A. easy entry and exit

B. many firms

C. differentiated products.

D. to maximize profits, a firm wil produce where MARGINAL COST=MARGINAL REVENUE.(or MC=MR)

Question 5.

Which of the following is true regarding monopolies:?

A. Monopolies produce too much and charge too much from the standpoint of effiency.

B. Monopolies usually are economically efficient b/c they have economic profits with which to work.

C. Monopolies produce too little and charge too much from the standpoint of effiency.

D. Monopolies create an effiency problem but are not associated witha an equity problem.

HELP PLEASE?????

Answer 1

Question 1.

A.Earning an economic profit.

Question 2.

C.increase in demand.

In response to the comment by Spartan-196 below: If only ONE FIRM would experience a decrease in production costs, the equilibrium price of the product would (probably) be unaffected, and that firm would increase its marginal revenue (Answer D.) However, the question states that production costs for FIRMS (plural) decrease "in a perfectly competitive market". Perfect competition leads each firm to lower the price (by passing on its cost savings to consumer) in order to increase market share. Since other firms in the industry do the same, the equilibrium price of the good will decrease, which in turn increases the demand for the good. Hence, answer C. is correct.

Question 3.

D. monopolistic competition

Question 4.

C. differentiated products.

Question 5.

C. Monopolies produce too little and charge too much from the standpoint of efficiency.

Answer 2

Wouldnt 2 be D: increase in firms' marginal revenue because if production costs drop, and you keep producing the same ammount and selling at the same price then that gap will be your profit