In the model of perfect competition, the market demand curve is found by
A) a marketing analysis.
B) taking the demand curve of a "representative consumer" and expanding it by the number of consumers of the good.
C) horizontally summing the demand curves of individual consumers.
D) horizontally summing the supply curves of individual firms.
C
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If the government takes over the distribution of some scarce good in a time of a natural disaster and provides the good at no charge to users, what must also be done?
A) The government must produce the good itself. B) Some rationing mechanism must be set up to determine who gets the good. C) Everyone hurt in the natural disaster must get one of the goods. D) nothing E) Because we live in a democracy, the government must use majority rule as the rationing mechanism.
Consider an industry that is in long-run equilibrium. An increase in demand leads to an increase in the price of the good. We know that this is
A) a decreasing cost industry. B) a constant cost industry. C) an increasing cost industry. D) not a competitive industry.
There are currently 1,000 firms in a competitive industry. Minimum long-run average cost is $80 and price $100 . Explain what will happen to price, profit, and the number of firms in this industry over time
Which of the following is one of the main features of our modern economy that helps ensure against a repeat performance of the Great Depression?
a. transfer payments b. outsourcing c. multiplier d. personal income tax