Who will lose more customers by raising their price, a firm operating in a perfectly competitive market or a
monopolistic competitor? Explain.
5. What will happen to the demand for Nabisco brand Chips Ahoy chocolate chip cookies if Pillsbury
introduces ready-to-eat chocolate macadamia nut cookies?
6. Craig quit a job earning $12,000 per year to open his own lawn-care service. Yesterday, he was offered a
job earning $20,000 per year at Home Depot, but he turned it down to continue running his lawn-care
service. Assuming that his total revenue (= P × Q) has not changed, (a) explain the impact of this job offer
on Craig’s economic profit, and (b) explain the impact of this job offer on his normal profit.
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