If, in a given market of multiple producers, there is a positive gap between price and average cost (P > AC) for an extended period of time, this would suggest that
A. there are many sellers in the industry.
B. there exists an oligopoly or cartel in the industry.
C. this is a contestable market.
D. the firm cannot be a monopolistic competitor.
Answer: B
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The producer surplus of making and selling 10 chairs is found by
A) multiplying the selling price by 10. B) subtracting the marginal cost from the selling price for each chair and summing the differences for all 10 chairs. C) subtracting from the total revenue the cost of producing one chair multiplied by 10. D) adding the marginal cost and the price of all 10 chairs. E) None of the above answers is correct.
In the dynamic aggregated demand and aggregate supply model, if AD shifts faster than AS
A) stagflation occurs. B) deflation occurs. C) disinflation occurs. D) inflation occurs.
According to growth accounting estimates, during the 1929-1982 period, increases in capital and labor account for about ______ of total growth
a. 0 percent. b. 25 percent. c. 50 percent. d. 90 percent. e. none of the above.
The permanent income hypothesis indicates that increased savings will cause an increase in long term income
a. True b. False Indicate whether the statement is true or false