Refer to the information provided in Figure 9.2 below to answer the question(s) that follow.
Figure 9.2Refer to Figure 9.2. If demand for wheat is D1, then in the long run
A. new firms will enter the industry, and the current firms will expand production.
B. the firm will exit the industry.
C. firms will increase their output so that their average fixed cost per unit falls.
D. the firm will increase its price and output.
Answer: B
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The concept of incidence is used to:
A. indicate which tax bears the bigger burden. B. describe unexpected tax revenue generated. C. describe who bears the burden of a tax. D. describe how often people are taxed.
When demand is inelastic,
A. selling one more unit of output causes marginal revenue to increase. B. the percentage change in quantity demanded will exceed the percentage change in price (in absolute value). C. quantity sold does not increase when price decreases. D. buyers are not very responsive to changes in the price of the product. E. selling one more unit of output cause total revenue to increase.
Which of the following is NOT an automatic stabilizer?
A. A change in the tax rate to fight a recession. B. A decrease in tax collections due to a recession. C. Decreased unemployment benefits as the economy expands. D. Increased public assistance payments during a recession.
A monopolist supply curve can be defined in the same way that it can for a perfectly competitive firm.
Answer the following statement true (T) or false (F)