In the long term, if government forces monopoly firms to price their products at PMC and to sell QMC output, firms will ______.
a. purchase new equipment and increase profits
b. fail to replace worn out capital and shut down
c. invest too much in capital and shut down
d. maintain stable profits by using capital more efficiently
b. fail to replace worn out capital and shut down
You might also like to view...
Refer to Figure 11-1. Suppose the per-worker production function in the figure above represents the production function for the U.S. economy
If the United States decided to double its support of university research, this would cause a movement from A) B to A. B) B to C. C) A to B. D) D to C.
Monetary policy consists of changes in taxes, which in turn affects the amount of money households can spend on consumption
Indicate whether the statement is true or false
Use the above table. The MFC of the 3rd worker is
A) $5. B) $30. C) $20. D) $6.7.
If consumers often purchase muffins to eat while they drink their lattés at local coffee shops, what would happen to the equilibrium price and quantity of lattés if the price of muffins rises?
a. Both the equilibrium price and quantity would increase. b. Both the equilibrium price and quantity would decrease. c. The equilibrium price would increase, and the equilibrium quantity would decrease. d. The equilibrium price would decrease, and the equilibrium quantity would increase.