Suppose the market price exceeds the typical perfectly competitive firm's short-run average total cost. What will happen to this market in the long run?
a. The market demand curve will shift to the left as firms exit.
b. The market supply curve will shift to the left as firms exit.
c. The market demand curve will shift to the right as firms enter.
d. Both the market demand and supply curves will shift to the left as firms exit.
e. The market supply curve will shift to the right as firms enter.
E
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In the short run,
a. at least one of the firm's inputs is fixed b. customer tastes and preferences are fixed c. the firm may vary all inputs d. sunk costs are variable e. government intervention is inevitable
Calculate the expected value of an investment that has the following payoff frequency: a quarter of the time it will pay $2,000, half of the time it will pay $1,000 and the remaining time it will pay $0.
What will be an ideal response?
Productive efficiency refers to:
A. the use of the least-cost method of production. B. the production of the product mix most wanted by society. C. the full employment of all available resources. D. production at some point inside of the production possibilities curve.
In some markets consumers may buy many different brands of a product. Which of the statements below best represents a situation where demand for a particular brand would be very elastic?
A. "The brand I buy is so superior to other available brands that I hardly consider the others." B. "I use so little of that product that when I do buy it, I don't pay much attention to the price." C. "The different brands are almost identical. I always buy the cheapest." D. "I pinch pennies in buying other products, but like most people I feel I owe it to myself to get the best brand of this product."