How is a contestable market similar to a perfectly competitive one?
What will be an ideal response?
A contestable market is similar to a perfectly competitive market in that there is free entry and exit. As a result, the active firm(s) cannot earn an economic profit in the long-run because potential entrants will enter any time economic profits exceed zero.
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Expansionary monetary policy is designed to stimulate the economy by increasing the money supply, but not create much inflationary pressure
Indicate whether the statement is true or false
The backward-bending supply curve of labor applies to _____
a. individuals b. groups c. the economy as a whole d. theoretical models
When the supply of a good decreases and the demand for the good remains unchanged, consumer surplus
a. decreases. b. is unchanged. c. increases. d. may increase, decrease, or remain unchanged.
Total cost is
A) \TFC - TVC. B) TFC/TVC. C) TFC + TVC. D) AFC + AVC.