Suppose the firms in a monopolistically competitive market are incurring economic losses. What will happen to move the market to its long-run equilibrium?
A) More close substitutes will appear in the market until economic profits are zero.
B) The firms that dropped out of the market will reenter once the level of economic losses is zero.
C) Firms will continue to exit the market until economic losses are equal to zero.
D) The demand functions of all the firms remaining in the market will become relatively more elastic.
C
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The above figure shows Jane's budget line and two of her indifference curves. Which of the following happens to Jane's budget line if the price of a lobster dinner fell?
A) It would rotate inward around the vertical intercept, 10 lobster dinners. B) It would rotate outward around the vertical intercept, 10 lobster dinners. C) It would rotate inward around the horizontal intercept, 20 steak dinners. D) It would rotate outward around the horizontal intercept, 20 steak dinners.
If the risk adjusted discount rate method and the certainty equivalent methods are to give the same results, then the certainty equivalent factor (at) must equal (where rf is the risk-free interest rate, and "k" is the risk adjusted cost of capi
) A) (1 + rf)t times (1 + k)t. B) (1 + k)t divided by (1 + rf)t. C) (1 + rf)t divided by (1 + k)t. D) (1 + k)t minus (1 + rf)t.
Commercial policy is a government policy aimed at influencing:
a. the operation of commercial banks. b. domestic trade flows. c. domestic private corporations. d. international trade flows. e. the operation of capital markets.
Wages will tend to be high in labor markets where supply is relatively high and demand is relatively weak
a. True b. False Indicate whether the statement is true or false