Subsidies _______________the cost of production, encouraging current producers to stay in the market and new producers to enter.
Fill in the blank(s) with the appropriate word(s).
Answer: lower
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
Economics is the study of how ________ manages its ________ resources to satisfy its wants
A) society; unlimited B) society; scarce C) a household; unlimited D) a household; scarce
Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the short run would be:
A. P3 and Y1. B. P2 and Y1. C. P2 and Y3. D. P1 and Y2.
If the demand curve for a firm's output is P=200-10Q, the marginal revenue curve will be
A. MR=200-5Q. B. MR=20-Q. C. MR=P*. D. MR=200-20Q.