The fact that barriers to entry are low in competitive price-searcher markets means that if current firms are making economic losses,
a. these losses will remain in the long run because no firms can exit the market.
b. current firms will exit the market, causing the demand curves that face the remaining firms to increase.
c. new firms will enter the market, causing the demand curves that face the existing firms to decrease.
d. new firms will enter the market, causing no change in the demand curves that face the existing firms in the market.
B
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An industry which has no barriers to entry, no product-promotion strategy, a standardized product, and a very large number of firms operating within it, is said to have:
a. a monopoly market structure. b. perfect competition. c. monopsonistic competition. d. monopolistic competition. e. an oligopoly market structure.
The actions of speculators
a. help smooth out price fluctuations. b. serve no useful economic purpose. c. make investment much more risky. d. cause severe shortages of some commodities.
A higher price level would mean ____ for a person who has a bank deposit of $2 million
a. an increase in real income b. a decrease in real wealth c. a decrease in nominal income d. an increase in nominal income
The Fed increases reserves if it conducts open market
a. purchases or auctions term credit. b. purchases but not if it auctions term credit c. sales or auctions term credit d. sales but not if it auctions term credit