As new firms enter a decreasing-cost industry
A. the position of the LRAC curve doesn't change, but firms move down their LRAC curve.
B. the LRAC curve shifts down.
C. the LRAC curve shifts up.
D. the position of the LRAC curve doesn't change, but firms move up their LRAC curve.
Answer: B
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Expansionary monetary policy is likely to lead to a depreciation of the nation's currency
Indicate whether the statement is true or false
The long-run aggregate supply curve is influenced by:
A) resources available. B) efficiency levels. C) level of technology. D) all of the above.
According to Tobin's q theory, if q is ________, new plant and equipment capital is ________ relative to the market value of business firms, so companies can buy a lot of new investment goods with only a ________ issue of stock
A) high; dear; large B) high; cheap; large C) high; cheap; small D) low; cheap; large E) low; cheap; small
Compare and contrast the four market models in terms of the profit-maximizing output level for each, the shut-down rule for each, the probability of long-run economic profits being earned, and their social desirability