The market for home-delivered pizza is extremely competitive in Introville, Utah, and prices continue to fall. Assume they have fallen so low that the 20 pizza delivery firms are all suffering economic losses. What will likely happen in the long run?
With all firms earning economic losses, we would expect some to exit the industry. As some firms leave, those remaining will find that the demand for their product has increased. Prices will then rise until the firms that remain are earning the normal rate of return.
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When investment increases, the ________ in aggregate demand is ________ the change in investment
A) increase; the same as B) increase; greater than C) decrease; greater than D) decrease; the same as E) increase; smaller than
When disposable income is 2500, induced consumption is
A. -500.
B. 0.
C. 500.
D. 1000.
Which of the following factors is not a barrier limiting the entry of potential competitors into a market?
a. legally enforced patent rights b. an inelastic demand for a product c. licensing d. control over an essential resource
When interest rates in a given economy are reduced, it causes firms to employ __________ capital goods. In terms of the production function (graphed with labor on the horizontal axis and Real GDP on the vertical axis), this then causes ____________________
A) more; the production function to shift upward B) less; the production function to shift downward C) more; a movement up along a given production function D) more; a movement down along a given production function