Excess capacity refers to the:
A. amount by which actual production falls short of the minimum ATC output.
B. fact that entry barriers artificially reduce the number of firms in an industry.
C. differential between price and marginal costs that characterizes monopolistically
competitive firms.
D. fact that most monopolistically competitive firms encounter diseconomies of scale.
Answer: A
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If the overall price level decreases, then the aggregate demand curve will shift to the right
a. True b. False Indicate whether the statement is true or false
A business with market power may
A. create new markets due to competitive forces. B. sometimes use high profits to research new technologies. C. be less innovative than businesses in perfect competition. D. force employees to work harder and longer.
A direct relationship occurs when
A. the two variables being compared change in opposite directions, or when one goes up the other goes down. B. the two variables have no identifiable relationship with each other. C. a change in one of the variables causes a change in the other variable in any direction. D. the two variables being compared change in the same direction, or when one goes up the other also goes up.
Large increases in the availability of labor would likely be a source of
A. import competing growth. B. generalized growth. C. specialized growth. D. concentrated growth.