Exam 14: Monopolistic Competition

Use the table below to answer the following question. Table 14.2.1 -Refer to Table 14.2.1. Sara is a dot.com entrepreneur who sells sweatshirts. She pays $1,000 a week for her Web server and Internet connection. She pays the firm that makes the sweatshirts $20 a sweatshirt. Sara has no other costs. The table sets out the demand schedule for Sara's sweatshirts. Other firms ________ enter the Web sweatshirt business and compete with Sara. In the long run, the demand for Sara's sweatshirts ________ and her economic profit ________.

In monopolistic competition, each firm supplies a ________ part of the total industry output and its actions ________ the actions of the other firms.