If firms in a monopolistically competitive market are earning economic profits, which of the following scenarios would best describe the change existing firms would face as the market adjusts to the long-run equilibrium?
a. an increase in demand for each firm
b. a decrease in demand for each firm
c. a downward shift in the marginal cost curve for each firm
d. an upward shift in the marginal cost curve for each firm
b
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Open market operations by the Fed cause
A) the prices of bonds to change. B) changes in the required reserve ratio. C) aggregate supply to change. D) changes in the difference between the discount rate. and the federal funds rate.
A scatter diagram with the price of vacations to Mexico on the vertical axis and the price of vacations to California on the horizontal axis shows a positive relationshi
A) negative relationship, also called a direct relationshi
The optimal level of military expenditures is the level at which _____
a. a country is completely protected from foreign invasion b. a country spends more on national defense than all other countries along it to win an arms race c. a country spends more on national than its rivals d. the marginal benefit of additional expenditures equals marginal cost
The price elasticity of demand equals 1:
A. whenever the slope of a straight-line demand curve equals zero. B. at the midpoint of a straight-line demand curve. C. whenever the slope of a straight-line demand curve is greater than 1 in absolute value. D. whenever the slope of a straight-line demand curve is less than 1 in absolute value.