Refer to the information provided in Figure 12.3 below to answer the question(s) that follow. 
Figure 12.3
Refer to Figure 12.3. The DVD industry is a constant-cost industry. As the demand for DVD players shifts from D' to D, which of the following will not occur?
A. If the market for DVD players is perfectly competitive, economic profits in this industry will decrease in the short run, but will fall back to zero in the long run.
B. Fewer resources will be allocated to produce DVD players.
C. If the market for DVD players is competitive the price will decrease to $4.00 in the short and long run.
D. The demand for DVDs will decrease.
Answer: C
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Refer to the scenario above. What is the payoff to Firm A in equilibrium?
A) $2.4 million B) $2.6 million C) $5.2 million D) $3.0 million
An excess quantity supplied can be corrected by
A) a fall in price. B) legally fixing the price at its present level. C) a decrease in demand. D) an increase in supply.
The circular flow diagram shows the flow of money and goods and services between households, firms, government, and foreign countries
a. True b. False Indicate whether the statement is true or false
Real GDP
a. is nominal GDP adjusted for changes in the price level. b. is also called nominal GDP. c. measures GDP minus depreciation of capital. d. will always change when prices change.