Refer to the diagram for a noncollusive oligopolist. Suppose that the firm is initially in equilibrium at point E, where the equilibrium price and quantity are P and Q. If the firm's rivals will ignore any price increase but match any price reduction, then the firm's demand curve will be (moving from left to right):
A. D 1 ED 2 .
B. D 2 ED 1 .
C. D 1 ED 1 .
D. D 2 ED 2
B. D 2 ED 1 .
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
Refer to Table 19-18. What is the GDP deflator in 2016 if 2016 is the base year?
A) 120 B) 118 C) 100 D) 87
Explain the difference between actual output and potential output. What does the difference between these variables represent?
What will be an ideal response?
Refer to the above diagram. All data are for the short run. Which of the following statements is correct?
A. At price P1, the firm will close down. B. Production is profitable only when price is at P2. C. Average fixed cost is P1P3 at output Q1. D. The firm will produce an output of Q1 when price is P1.