Firms in perfectly competitive industries are unable to control the prices of the products they sell and earn a profit in the long run. Which of the following is one reason for this?
A) Firms from other countries are able to produce similar products at lower costs.
B) Firms in perfectly competitive industries can use advertising in the short run to persuade consumers that their products are better than those of other firms. But eventually consumers realize that all of the firms sell virtually identical products.
C) Firms in these industries sell identical products.
D) Owners of perfectly competitive firms realize that their short-run profits are temporary. Therefore, they either sell their businesses or develop other products that will earn short-run profits.
C
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A change in input prices has no impact on a firm’s budget line.
Answer the following statement true (T) or false (F)
If the U.S. dollar price of one Japanese yen was $0.009 in 1997 and $0.011 in 2001, then the reciprocal exchange rate adjusted from $1 = ¥111.1 in 1997 to $1 = ¥90.9 in 2001 . This implies that over this time period, the U.S. dollar experienced a depreciation relative to the Japanese yen
a. True b. False Indicate whether the statement is true or false
The interest rate effect helps explain why a lower price level will reduce the quantity of real goods and services demanded as an economy moves down along its aggregate demand curve
a. True b. False Indicate whether the statement is true or false
Which of the following is the best definition of economics?
a. An investigation of the quantities and prices of the various goods produced by the nations of the world. b. A study of why inflation and unemployment periodically plague the U.S. economy. c. An analysis of how individuals and societies deal with the problem of scarcity. d. An examination of the role that money plays in the economy. e. A study of how goods and services are distributed throughout the world.