If firms in a monopolistically competitive market are earning negative economic profits, the demand curve of a single firm will likely:
A. shift right, as other firms leave the industry.
B. shift left, as other firms leave the industry.
C. shift right, as other firms enter the industry.
D. shift left, as other firms enter the industry.
A. shift right, as other firms leave the industry.
You might also like to view...
If Janet Yellen, Chair of the Federal Reserve Board, begins to tighten monetary policy by raising US interest rates next year, what is the likely impact on the value of the dollar?
a. The value of the dollar falls when US interest rates rise. b. The value of the dollar rises when US interest rates rise. c. The value of the dollar is not related to US interest rates. d. This is known as Purchasing Power Parity or PPP. e. The Federal Reserve has no impact at all on interest rates.
When economists make normative statements, they are
a. speaking as scientists. b. speaking as policy advisers. c. making claims about how the world is. d. revealing that they are very liberal in their views of how the world works.
The negative relationship between the quantity demanded of a commodity and its price can be explained by the principle of
A. increasing total utility. B. contingent valuation. C. diminishing marginal utility. D. indifference analysis.
An increase in the U.S. price level, other things constant, will
What will be an ideal response?