1. The trade-off with entry is that an increase in the number of firms leads to higher _________but greater _______.
2. When products are differentiated by location, the entry of firms generates benefits for consumers in the form of_______.
3. A perfectly competitive firm has a _______demand curve, whereas a monopolistic competitive firm has a _______demand curve.
4. In the long-run equilibrium in a perfectly competitive market, price is equal to both _______and_______.
5. Arrows up or down: As product differentiation diminishes, the price elasticity of demand for the product of a monopolistically competitive firm and _______the average cost of production _______.
6. The entry of firms into the market for space flight is expected to _______the price of a trip to the International Space Station from $47 million to about $ _______.
7. Uniform Trade-Offs. A prominent feature of Mao s Communist China in the 1940s through the 1970s was the blue uniform worn by all citizens.
a. Explain the trade-offs associated with the use of uniforms. What were the benefits? What were the costs?
b. Suppose people had a choice among five uniform colors rather than being required to wear blue. Would you expect the benefits of requiring uniforms to decrease by a little or a lot?