In the figure above, the efficient amount of output is
A) 20 units per day.
B) 40 units per day.
C) 60 units per day.
D) 80 units per day.
B
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How can it be that people purchase more of a good while its price is rising?
A) The supply curve must be shifting to the left. B) The demand curve must be shifting to the right. C) Supply and demand do not change. D) It cannot happen, otherwise the law of demand is violated.
Which of the following is true of the model of monopolistic competition?
a. Barriers to entry enable firms to enjoy positive profits in the long run. b. The number of firms declines over time as a result of economies of scale. c. The monopolistically competitive firms enjoy a greater market power than a monopolist. d. Firms tend to locate near each other in order to minimize total travel costs for consumers. e. The firms end up charging same prices for their individual products.
The long-run aggregate supply curve intersects the horizontal axis at the:
A. actual rate of inflation. B. potential level of output. C. expected rate of inflation. D. current level of output.
A firm that is earning positive profits in the short run has an incentive to ________ its scale of operation in the long run.
A. expand B. not change C. contract D. encourage another firm to expand