If all the firms in a perfectly competitive industry are earning economic profits, in the long run all of the following will happen except
A. the supply curve will shift to the right.
B. new firms will enter the industry.
C. the equilibrium price of the product will fall.
D. that the demand curve will shift to the right.
D. that the demand curve will shift to the right.
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Refer to Scenario 14.4. Suppose that the price of the product rises to $5. Which of the following curves shifts?
A) MP curve B) MRP curve C) Supply of labor curve D) Marginal expenditure curve
A binding price floor i. causes a surplus. ii. causes a shortage. iii. is set at a price above the equilibrium price. iv. is set at a price below the equilibrium price
a. (i) only b. (iii) only c. (i) and (iii) only d. (ii) and (iv) only
What type of business has been created when one firm is able to supply the total quantity demanded in a market at lower costs than two or more firms could produce?
a. Natural monopoly b. Artificial monopoly c. Anti-trust monopoly d. Regulatory monopoly
Consumers should allocate their income so that the marginal utility associated with the:
a. first dollar spent is equal for all goods. b. last dollar spent is equal for all goods. c. last dollar spent is lower for high-priced items than for low-priced items. d. first dollar spent is greater for high-priced items than for low-priced items. e. first dollar spent is less for high-priced items than for low-priced items.