What happens in a perfectly competitive industry when economic profit is greater than zero?
A) Existing firms may get larger.
B) New firms may enter the industry.
C) Firms may move along their LRAC curves to new outputs.
D) There may be pressure on prices to fall.
E) All of the above may occur.
E
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Everything else remaining unchanged, what is likely to happen to the equilibrium quantity of credit and the real interest rate if:
a. the credit demand curve shifts to the right? b. the credit supply curve shifts to the left? What will be an ideal response?
If a negative externality were present in a market, the social benefit curve would be:
A. above the private demand curve. B. below the private demand curve. C. the same as the private demand curve. D. Cannot say without more information.
One way to predict the future profitability of a company is through:
A. technical analysis. B. fundamental analysis. C. using current prices. D. All of these are ways to predict a company's worth.
The industry demand for labor in a competitive labor market
a. is the same as the individual demand for labor in a perfectly competitive market b. is a horizontal curve at the market wage rate c. slopes upward when there are diminishing returns d. is the sum of the individual firms' demand curves for labor e. is downward sloping only if all firms that employ labor are identical