Assume that a perfectly competitive increasing-cost industry is in long-run equilibrium when market demand suddenly increases. Which of the following statements is not correct?
a. Existing firms will earn economic profits in the new long-run equilibrium
b. Existing firms will increase output in the short run
c. New firms will enter the industry in the long run
d. Some resource suppliers to the industry will earn higher income
e. The new long-run equilibrium price will exceed the original equilibrium price
A
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Bobby moves along an indifference curve for shirts and pants by increasing consumption of shirts and decreasing consumption of pants. As Bobby has more and more pants, the number of shirts he is willing to trade for yet another pair of pants
A) decreases. B) increases. C) does not change. D) initially decreases and then increases.
Describe the differences between classical and Keynesian economists in terms of their views about monetary neutrality
What will be an ideal response?
SSI differs from other programs in that
A. it is administered by the states rather than the Federal government. B. it is part of the Social Security system. C. it provides actual food. D. it is administered by the Internal Revenue Service rather than a human services agency.
Unemployment compensation payments:
A. rise during a recession and thus reduce the severity of the recession. B. rise during a recession and thus increase the severity of the recession. C. rise during inflationary episodes and thus reduce the severity of the inflation. D. fall during a recession and thus increase the severity of the recession.