Other things being equal, the lower the value of elasticity:
A. the more likely the profitability of a price increase.
B. the less likely the profitability of a price increase.
C. the greater the responsiveness in quantity demanded to a price change.
D. the lower the corresponding increase in firm revenue.
Answer: A. the more likely the profitability of a price increase.
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The relationship between the MPS and the MPC is such that
A. 1 ? MPC = MPS. B. MPC - MPS = 1. C. MPS/MPC = 1. D. MPC ? 1 = MPS.
Entry barriers can lead to long-run economic profits.
Answer the following statement true (T) or false (F)
A firm operating in a perfectly competitive industry will shut down in the short run if its economic profits fall to zero because it is likely to be earning negative accounting profits
a. True b. False Indicate whether the statement is true or false
Which of the following statement is FALSE?
A. A market may be composed of only one buyer and one seller. B. Perfectly competitive markets are composed of many buyers and sellers. C. Some markets may have only a few sellers but exhibit the properties of perfect competition. D. All of the above statements are correct.