Suppose a perfectly competitive increasing-cost industry is in long-run equilibrium when market demand suddenly increases. What happens to the typical firm in the long run?
a. It experiences no change from the original equilibrium
b. It experiences a higher average total cost and equilibrium price
c. It experiences a lower average total cost and equilibrium price
d. It experiences the same equilibrium price but a greater average total cost
e. It experiences the same equilibrium price but a lower average total cost
B
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What is technological change?
What will be an ideal response?
The fraction of an industry's sales that are accounted for by the largest firms is called
A) the four-firm oligopoly ratio. B) the four-firm competition ratio. C) the four-firm industry ratio. D) the four-firm concentration ratio.
Demand-pull inflation can result when
A) policymakers set an unemployment target that is too high. B) a persistent budget deficit is financed by selling bonds to the public. C) a persistent budget deficit is financed by selling bonds to the central bank. D) workers get numerous wage increases.
An insurance company offering a high-deductible plan is an example of:
A. screening. B. signaling. C. statistical discrimination. D. building a reputation.