Suppose in the city of Smugsburg, Blu-ray disc rental stores operate in a monopolistically competitive market. If the price of Blu-ray disc rentals in Smugsburg is currently equal to $5 per tape and the average cost of renting videos is $1 per Blu-ray disc, in the long run we expect the price of renting Blu-ray discs to:
A. increase.
B. stay the same.
C. decrease, and the average cost of Blu-ray disc rentals to increase.
D. decrease, and the average cost of Blu-ray disc rentals to decrease.
Answer: C
You might also like to view...
When studying pollution and the environment, economists
A) have no role to play. B) concentrate on the physical aspects of the environment. C) emphasize costs and benefits. D) attempt to reduce pollution at all costs. E) think pollution is good if it occurs when production takes place.
Which of the following statements is (are) correct? According to real business cycle theory,
a. the desirable monetary policy would appear to be one that results in a slow steady growth in the money supply and, thus, stable prices. b. there is some role for activist monetary stabilization policy of a Keynesian type. c. changes in aggregate demand cannot impact output. d. Both a and b e. Both a and c
Aggregate demand is _____________.
Fill in the blank(s) with the appropriate word(s).
Externalities can only involve the imposition of harm on a party not directly involved in an economic transaction.
Answer the following statement true (T) or false (F)