Answer the following statements true (T) or false (F)
1. When firms in a purely competitive industry are earning profits that are greater than normal, the supply of the product will tend to decrease in the long run.
2. When new firms enter a purely competitive industry, the market supply curve will shift to the left.
3. When some firms leave a purely competitive industry, the market supply curve will shift in such a way that the remaining firms' profits will increase.
4. In the long run, pure competition forces firms to produce at the minimum possible average total cost and the firms will charge a product price equal to that cost.
5. A purely competitive firm that is earning positive profits in its short-run equilibrium situation will continue to earn positive profits at the long-run equilibrium.
1. FALSE
2. FALSE
3. TRUE
4. TRUE
5. FALSE
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Marge would like her husband Homer to drink less beer. All of the following are ways she could encourage Homer to drink less beer except
A) pay him to drink less beer. B) convince him that beer is good for his health. C) refuse to cook dinner for him if he does not cut back on his beer drinking. D) make him pay her $10 for every beer he drinks.
The landmark antitrust case which established that size alone can be an antitrust violation is the:
a. U.S. Steel case. b. Brown Shoe case. c. Von's Grocery case. d. ALCOA case. e. Pabst Brewing case.
Today's supply curve for iPods could shift in response to a change in
a. today's price of iPods. b. the expected future price of iPods. c. the number of buyers of iPods. d. All of the above are correct.
In the provided graph, the equilibrium point in the market is where the S and D curves intersect. At equilibrium, consumer surplus would be represented by the area
What will be an ideal response?