If competitive industry Z is making substantial economic profit, output will:
A. fall in industry Z and firms will likely leave the market.
B. fall in all industries except industry Z.
C. expand in industry Z as more resources will move to that industry.
D. expand in industry Z, but no new firms will enter the market.
Answer: C
You might also like to view...
For a demand-pull inflation to persist requires persistent increases in
A) real GDP. B) the quantity of money. C) tax rates. D) government expenditures. E) the real wage rate.
Increasing productivity per person:
A. is highly desirable, as it leads to economic growth. B. is unavoidable, and macroeconomists work to prevent it. C. can harm an economy if misallocated. D. is highly undesirable, as it leads to increases in GDP per capita.
A technological advance that increases labor productivity will:
a. decrease the supply of labor as fewer workers are needed. b. increase the demand for labor as MP rises. c. decrease the demand for labor as fewer workers are needed. d. lower wages.
Explain the role of economies of scale in oligopoly.
What will be an ideal response?