The above figure shows the cost curves for a perfectly competitive firm. If all firms in the market have the same cost curves and the price equals $16 per unit
A) the market is in its long-run equilibrium.
B) over time, firms will leave this market.
C) the firm is making zero economic profit.
D) over time, the price will fall as new firms enter the market.
D
You might also like to view...
A corporation is legally owned by its
A. chief executive officer. B. board of directors. C. bondholders. D. stockholders.
Extrapolative expectations work when prices are rising, but not when prices decline.
Answer the following statement true (T) or false (F)
From 1970 to 1998 the U.S. dollar
a. gained value compared to the Italian lira because inflation was higher in Italy. b. gained value compared to the Italian lira because inflation was lower in Italy. c. lost value compared to the Italian lira because inflation was higher in Italy. d. lost value compared to the Italian lira because inflation was lower in Italy.
Which of the following is a correct statement of the impacts of a lump-sum tax?
A. Disposable income will increase by the amount of the tax and consumption at each level of GDP will decline by the amount of the tax multiplied by the MPC. B. Disposable income will decline by the amount of the tax and consumption at each level of GDP will decline by the amount of the tax multiplied by the multiplier. C. Disposable income will decline by the amount of the tax and consumption at each level of GDP will also decline by the amount of the tax. D. Disposable income will decline by the amount of the tax and consumption at each level of GDP will decline by the amount of the tax multiplied by the MPC.