Hubert's Copy Services is in perfect competition. Hubert currently charges 10 cents per page, which is the going market price. He thinks that he can increase his profit by raising the price. Is it possible? Why or why not?
What will be an ideal response?
If Hubert raises his price, his profit will not increase. As a perfectly competitive firm, Hubert's is a price taker. It produces a tiny proportion of the copy services in the area, and buyers are well informed about the prices charged by other firms. So, if the market price is 10 cents per page and Hubert asks, say, 12 cents per page, his customers will go to the next copy service and Hubert will lose all his sales.
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The Fed can influence unemployment in
a. the short run and in the long run. b. the short run, but not in the long run. c. the long run, but not in the short run. d. neither the short nor the long run.
In the open-economy macroeconomic model, if the supply of loanable funds shifts left
a. the interest rate rises and the supply of dollars in the market for foreign currency exchange shifts right. b. the interest rate rises and the supply of dollars in the market for foreign currency exchange shifts left. c. the interest rate falls and the demand for dollars in the market for foreign currency exchange shifts right. d. the interest rate falls and the demand for dollars in the market for foreign currency exchange shifts left.
Which of the following would be expected to cause the quantity of wool supplied to decrease?
A. A decrease in the number of wool producers B. An increase in wages paid to workers in the wool industry C. A decrease in the price of wool D. An increase in the cost of raising sheep