Firms producing an identical product in a perfectly competitive market are producing at a quantity that maximizes profit. The current market price is $4.50 per unit, and the firms are producing at a long-run average cost of $3.50 per unit. Firms in this market experience
a. a profit
b. a loss and leave the market
c. zero profit
d. a loss and stay in business
a. a profit
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A rightward shift in the aggregate demand curve is most likely to result in
A. deflation. B. recession. C. inflation. D. decrease in employment.
Suppose the economy is initially in short-run equilibrium and the Fed decreases the nominal money supply. If the price level remains constant, real GDP will ________ relative to potential GDP and the real interest rate will ________
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
In 1910 _____________ of children between the ages of 10 and 15 had jobs, but by 1920, this percentage had fallen to ____________
a. 50 percent; 25 percent b. 30 percent; 20 percent c. 20 percent; less than 10 percent d. 10 percent; less than 1 percent
"Monopolists do not worry about efficient production and cost saving since they can just pass along any increase in costs to their consumers." Is this statement true? Explain your answer