Assume the tennis ball industry, a perfectly competitive, increasing?cost industry, is in long-run equilibrium with a market price of $5. If the demand for tennis balls decreases, long-run equilibrium will be reestablished at a price
A. less than $5.
B. equal to $5.
C. greater than $5.
D. either greater than or less than $5, depending on the number of firms that enter the industry.
Answer: A
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Roaring Lion Studios can produce DVDs at a constant marginal cost of $5 per disk, and the studio has just releasing the DVD for its latest hit film, Ernest Goes to the Hamptons
The retail price of the DVD is $25, and the elasticity of demand for this film is -2. Has the studio selected the profit-maximizing retail price for this DVD? A) Yes B) No, the retail price is too low C) No, the retail price is too high D) We do not have enough information to answer this question.
The Human Genome Project is a useful example of
A. private sector and public sector collaboration. B. government-conducted research. C. private sector research. D. government spending.
Richard is consuming X and Y so that he is spending his entire income and MUx/Px = 6 and MUy/Py = 10. To maximize utility, he should
A. continue to consume the same amount of X and Y since he is already maximizing utility. B. consume less of both X and Y. C. consume less X and more Y. D. consume more X and less Y.
Walmart entered the grocery business in the 1990s. By 2005, it was the ________ grocery chain in the U.S.
A. fourth-largest B. largest C. third-largest D. second-largest