A contestable market is a market
a. that is highly contested by two, and only two, rival firms.
b. in which the costs of entry and exit are low.
c. characterized by high profitability and government regulation.
d. characterized by a large number of firms; in essence, the term means the same thing as pure competition.
B
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A perfectly competitive firm in a constant-cost industry produces 3,000 units of a good at a total cost of $36,000. The prevailing market price is $15
What will happen to the number of firms in the industry and to the industry's output in the long run? A) The number of firms remains constant and the industry's output decreases. B) The number of firms and the industry's output increase. C) The number of firms remains constant and the industry's output increases. D) The number of firms and the industry's output decrease.
The Federal Reserve views commercial bank use of the discount window as
A) something to be used only by commercial banks. B) completely up to the borrower. C) a privilege, not a right for eligible borrowers. D) something to be used only in financial panics.
Suppose two countries, A and B, are at war with each other. Country A is very wealthy; country B is very poor. The XYZ Co produces tanks
Is XYZ able to set a different price for the tank sold to country A than the price for the tank sold to country B? Explain.
If a firm sells more than the break-even quantity,
a. It will make a profit b. It will only cover the variable costs c. It will make a loss d. A firm is unable to sell above the break-even quantity