In the long run when a perfectly competitive firm experiences negative economic profits
A) the high barriers to entry prevent further competition.
B) existing firms exit the industry.
C) additional firms enter the industry.
D) firms have no incentive to exit or enter the industry.
B
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Refer to Figure 15-10. The deadweight loss due to a monopoly is represented by the area
A) GEH. B) FGE. C) FQ1Q2E. D) FHE.
The term autarky refers to
a. equilibrium after trade begins between two countries b. the gains received from trade c. self-sufficiency d. political isolationism e. the recognition that mutually beneficial trade is not possible between two countries
Why can superstar athletes and movie stars earn multimillion dollar salaries but superstar electricians and professors cannot?
a. Every customer in the market wants to enjoy the good supplied by the best producer. b. Technology makes it possible for the best producer to supply every customer at low cost. c. Customers are willing to pay more for entertainment than other services. d. Both a and b are correct.
A competitive economy assumes each industry consists of a:
A. large number of small firms facing a large number of small buyers. B. large number of small firms facing a few large buyers. C. few small firms facing a few small buyers. D. few large firms facing a large number of small buyers.