Suppose that the market for haircuts in a community is a perfectly competitive constant-cost industry and that the market is initially in long-run equilibrium. Subsequently, an increase in population increases the demand for haircuts. In the long run, we expect that:
Select one:
a. more firms will enter the market, driving the price of haircuts up and the profits of individual firms back down to zero.
b. firms will leave the market, driving the price of haircuts up and the profits of individual firms back down to zero.
c. more firms will enter the market, driving the price of haircuts down and the profits of individual firms back down to zero.
d. firms will leave the market, driving the price of haircuts up and the profits of individual firms
c. more firms will enter the market, driving the price of haircuts down and the profits of individual firms back down to zero.
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The figure above shows the market for candy. People become more concerned that eating candy causes them to gain weight, which they do not like. As a result, the
A) demand curve shifts from D2 to D1 and the supply curve does not shift. B) demand curve shifts from D1 to D2 and the supply curve shifts from S1 to S2. C) demand curve shifts from D2 to D1 and the supply curve shifts from S2 to S1. D) demand curve does not shift, and the supply curve shifts from S1 to S2.
When a model takes into account the fact that several different generations may coexist simultaneously, this is known as a(n)
A. neoclassical model. B. life-cycle model. C. overlapping generation model. D. crowding-out model.
Everything else held constant, Americans who love French wine benefit most from
A) a decrease in the dollar price of euros. B) an increase in the dollar price of euros. C) a constant dollar price for euros. D) a ban on imports from Europe.
The supply curve for a monopolist
a. is its marginal cost curve b. is vertical because there are no close substitutes for its product c. is horizontal because there are no close substitutes for its product d. slopes upward e. does not exist