In perfect competition, when market demand increases, explain how the price of the good and the output and profit of each firm changes in the short run
What will be an ideal response?
When market demand increases, the market price of the good rises, and the market quantity increases. Because price equals marginal revenue, the rise in the price means marginal revenue rises. As a result, each firm moves up its marginal cost curve and increases the quantity it produces. The firm's economic profit rises (or its economic loss decreases). If the firm had been making a normal profit before the increase in demand, after the increase the firm makes an economic profit.
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Technological advancement implies:
a. the increase in the quantity of inputs needed to produce a given quantity of output. b. the reduction in the quantity of inputs needed to produce a given quantity of output. c. the reduction in the productivity of a sector of the economy that has become obsolete. d. an increase in the labor to capital ratio in any production process. e. the growth in the natural resource endowment.
Which of the following reduces the potential burden of an increase in debt on future generations?
a. the growth rate of output is high b. in response to increased debt, parents save more to leave their children larger bequests c. some current government spending benefits future taxpayers d. All of the above are correct.
What will make a change in supply cause a small change in price?
What will be an ideal response?
________ unemployment occurs due to a mismatch between the jobs that are available and the skills of workers seeking jobs.
A. Structural B. Cyclical C. Frictional D. Voluntary