What determines the perfect competitor's supply curve? How is the industry supply curve found?
What will be an ideal response?
A supply curve shows the quantity supplied at various prices. The firm decides how much to supply at each price by equating price and marginal cost. Therefore, the marginal cost curve shows the quantity supplied at each price. However, at a price below the shutdown price, output is zero, so that portion of the marginal cost curve is not part of the supply curve. The industry supply curve is found by adding the quantities supplied of each firm for each price. It is the horizontal summation of the individual firms' supply curves.
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In monopolistically competitive markets, resources are:
A. overallocated because long-run equilibrium occurs where price exceeds marginal cost. B. underallocated because long-run equilibrium occurs where price exceeds marginal cost. C. overallocated because long-run equilibrium occurs where marginal cost exceeds price. D. underallocated because long-run equilibrium occurs where marginal cost exceeds price.
According to Figure 2.5, the United States civilian labor force participation rate in June 2013 was ________
A) 59% B) 43.8% C) 66.7% D) 64.0% E) none of the above
The market-day supply is drawn as a vertical line at a particular level of production because
a. output can easily be adjusted b. chronic excess supply is permanent c. output can completely adjust to price changes d. output can partially adjust to price changes e. output cannot be changed during the market day
The general rule to increase profits when two close complementary brands are jointly owned is
a. Increase prices for both brands b. Decrease prices for both brands c. Increase prices on one brand, decreasing it for the other d. Increase prices on one brand, keeping the prices of the second brand constant