If firms in a perfectly competitive market have dissimilar cost curves what will be the shape of the long-run supply curve?
If firms have dissimilar cost curves, such that there are more types of firms with finer differences between their costs, the long-run market supply curve will slope upward but show greater responsiveness than short-run supply.
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The government budget constraint says that ________
A) the difference between spending and revenues must equal the amount of new bond issues B) increases in spending must be matched by increases in revenue C) interest on government debt must be paid before tax revenues are spent on goods and services or disbursed as transfer payments D) state and local governments, in aggregate, cannot spend more than the federal government
Suppose that the nominal rate of interest is holding steady at 8 percent even as the anticipated rate of inflation rises. What is happening to the real rate of interest?
A) It is unchanged. B) It is increasing. C) It is decreasing. D) It equals the nominal interest rate.
If the economy is in a recession, it means that:
A. the economy is not in long-run equilibrium. B. total output is less than potential output. C. the short-run equilibrium is to the left of the long-run aggregate supply curve. D. All of these are true.
Which of the following is likely to increase the supply of labor?
a. a decrease in the population b. a relaxation of restrictions on immigration c. a decrease in fringe benefits d. an increase in the value placed on leisure