Suppose there are only two steel firms in the steel industry and their prices are equal to or very close to their ATCs. This circumstance suggests that
a. steel firms are not profit maximizing
b. steel has no close substitutes
c. the demand for steel is weak
d. quantity supplied is less than quantity demanded at the market prices
e. close substitutes are produced in other industries
E
You might also like to view...
In the midst of the Great Depression, President Roosevelt in a radio address to the nation encouraged everyone to "spend ourselves into prosperity." His advice reflected
A) Say's Law. B) the expenditure multiplier effect. C) his view that there should be no saving and no dissaving. D) his view that induced expenditure was less important than autonomous expenditure. E) the difference between actual aggregate expenditure and planned aggregate expenditure.
The ease and quickness with which an asset can be exchanged for goods, services, or other assets is its
A) risk. B) time to maturity. C) velocity. D) liquidity.
Answer the following statements true (T) or false (F)
1. Prior to 2006, the most severe trough in a U.S. business cycle since the Great Depression occurred in 1981–1982. 2. Psychological forces usually tend to moderate cyclical movements of the economy. 3. A recession is defined as a period in which real GDP is negative for two consecutive quarters. 4. Interest rates usually rise during the contraction phase of the business cycle. 5. The level of business activity at any time is affected by the trend, seasonal variations, random fluctuations, and cyclical fluctuations.
If price falls, what happens to the quantity demanded for a product?
a. It increases. b. It decreases. c. It does not change. d. Uncertain--economic theory has no answer to this question.