When market conditions in a competitive industry are such that firms cannot cover their total production costs, then
a. the firms will suffer long-run economic losses.
b. the firms will suffer short-run economic losses that will be exactly offset by long-run economic profits.
c. some firms will exit the market, causing prices to rise until the remaining firms can cover their total production costs.
d. all firms will go out of business, since consumers will not pay prices that enable firms to cover their total production costs.
c
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Answer the next question based on the following payoff matrix for a duopoly in which the numbers indicate the profit in millions of dollars for each firm. Firm A? High PriceLow PriceFirm BHigh priceA = $250A = $325??B = $250B = $200?Low priceA = $200A = $175??B = $325B = $175If firm B adopts the high-price strategy, then firm A would adopt the
A. low-price strategy and earn $325. B. high-price strategy and earn $250. C. high-price strategy and earn $200. D. low-price strategy and earn $175.
A heterodox model would not call for freezing wages and prices, but an orthodox one would
Indicate whether the statement is true or false
Among the factors that might lead to a divergence from the path of prices for a depletable resource predicted by the economic models are: (i) unexpected discoveries of new reserves; (ii) new technologies which reduce extraction costs
a. i and ii b. i but not ii c. ii but not i d. neither i nor ii
Which of the following statements about the distribution of physicians among specialties is true in the United States?
a. There are twice as many specialists as there are generalists. b. The majority of physicians specialize in general/family practice. c. The specialty distribution in the U.S. is similar to that of the rest of the world. d. There are twice as many generalists as there are specialists