When profit-maximizing firms in competitive markets are earning profits,
a. market demand must exceed market supply at the market equilibrium price.
b. market supply must exceed market demand at the market equilibrium price.
c. new firms will enter the market.
d. the most inefficient firms will be encouraged to leave the market.
c
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Which of the following is an example of an expansionary monetary policy action?
A. Raising the discount rate B. Selling bonds C. Reducing the reserve requirement D. Lowering the prime rate
Suppose that Microsoft and Google compete in the market for PC Internet browsers. Initially these firms compete as Cournot duopolies with symmetric reaction functions. If Microsoft enters into exclusive contracts with PC suppliers that preclude suppliers from loading Google's Internet browser on PCs loaded with the Windows operating system, then Google's marginal cost of distributing its browser will increase to $5 per unit.The new equilibrium would entail Microsoft supplying ________ browsers and Google supplying ________ browsers to the market. The end result is ________ profits for Google.
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