A perfectly elastic long-run supply curve indicates
A) a decreasing-cost industry.
B) a constant-cost industry.
C) an increasing-cost industry.
D) that some input prices change as firms enter and exit the industry.
B
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On the horizontal axis of a graph, generally
A) values increase from left to right. B) values increase from right to left. C) values can be positive and/or negative. D) Both answers A and C are correct.
If the government allows businesses to accelerate (increase) depreciation, then
A) the user cost of capital declines and V* increases. B) the user cost of capital declines and V* decreases. C) the user cost of capital increases and V* decreases. D) the user cost of capital increases and V* increases.
The actions taken by arbitrageurs in the foreign exchange markets
a. destabilize foreign exchange markets b. are highly risky c. have no effect on exchange rates d. help assure that exchange rates are equalized across all markets e. are the same as those undertaken by speculators
Holding all other forces constant, if increasing the price of a good leads to a decrease in total revenue, then the demand for the good must be
a. unit elastic. b. inelastic. c. elastic. d. None of the above is correct because a price increase always leads to an decrease in total revenue.