When perfectly competitive firms in an industry are earning positive economic profits,
a. we would expect entry into the industry
b. we would expect stability in the industry, since it is in long run equilibrium.
c. we would expect exit from the industry.
d. we do not know whether there would tend to be entry, exit, or stability in the industry.
a
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The Smoot-Hawley tariff triggered a trade war during the Great Depression of the 1930s
Indicate whether the statement is true or false
Demand for low budget items, such as candy, is generally ________ than demand for large budget items, such as automobiles.
A. higher B. lower C. more elastic D. less elastic
The income effect of a normal good is negative.
a. true b. false
Which of the following is NOT a characteristic of pure monopoly?
A) many sellers B) considerable price setting ability C) restricted ability to enter market D) long-run economic profits are possible