If a monopolistically competitive firm is earning profits in the short run:
A. the entry of competing firms will shift the firm's demand to the right.
B. the entry of competing firms will shift the firm's demand to the left.
C. the entry of competing firms will cause price to drop, but not affect the firm's demand curve.
D. the entry of competing firms will cause price to rise, but not affect the firm's demand curve.
B. the entry of competing firms will shift the firm's demand to the left.
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If an economy's depreciation is greater than its gross investment, then
A) net investment is negative and saving is negative. B) net investment is positive and saving is positive. C) net investment must equal saving. D) the economy's capital stock decreases. E) net investment is positive and saving is negative.
Scarcity of resources implies that people must make decisions consistent with the means they have available to them
a. True b. False Indicate whether the statement is true or false
Assume that the central bank increases the reserve requirement. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to real GDP and the nominal value of the domestic currency in the context of the Three-Sector-Model?
a. Real GDP rises, and nominal value of the domestic currency falls. b. Real GDP falls, and nominal value of the domestic currency rises. c. Real GDP rises, and nominal value of the domestic currency remains the same. d. Real GDP rises, and nominal value of the domestic currency rises. e. There is not enough information to determine what happens to these two macroeconomic variables.
If the marginal cost of producing the tenth unit of output is $2.50, and if the average total cost of producing the tenth unit of output is $3, then at ten units of output, average total cost is rising
a. True b. False Indicate whether the statement is true or false