A competitive firm's long-run supply curve is
a. horizontal at the firm's break-even price.
b. steeper than its long-run marginal cost curve.
c. identical to its long-run average cost curve.
d. more elastic than its short-run supply curve.
d. more elastic than its short-run supply curve.
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Assume you have been hired to advise two different firms, A and B, regarding the price each firm should charge for its product, focusing on the amount each firm should mark up price over marginal cost
While both firms are price setters, the product produced by firm A is extremely unique and enjoys widespread appeal. In contrast, firm B sells a fairly standard product for which there are are several good, but not perfect, substitutes. How would your advice to each firm differ? How does the price elasticity of demand influence your recommendations?
An increase in income (all else equal) will ALWAYS lead to a parallel shift of the budget line
Indicate whether the statement is true or false
If you hear that unemployment decreased by 2 percentage points to 6 %in the past year, while the labor force participation rate remained constant, it means:
A. on a net basis, 2 out of every 10 people lost their job in the last year. B. on a net basis, 20 out of every 1,000 unemployed persons found a job in the last year. C. on a net basis, 2 out of every 100 people lost their job in the past year. D. on a net basis, 4 out of every 100 unemployed persons found a job in the last year.
Assume that the full-employment level of output is $600 and the price level associated with full-employment output is 100. Also assume that the economy's current level of output is $550 and, at the price level of 100, current aggregate demand is $450. If the government wants to move the economy back to the full-employment level of output and the MPC is 0.9, then it should
A. increase government purchases by $50. B. increase government purchases by $15. C. increase government purchases by $5. D. increase government purchases by $150.