Consider an industry that is in long-run equilibrium. An increase in demand leads to a decrease in the price of the good. We know that this is
A. a decreasing-cost industry.
B. a constant cost industry.
C. an increasing-cost industry.
D. not a competitive industry.
Answer: A
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Suppose the pizza at Pizza House and Little Weezer's are fairly close substitutes. If Pizza House raises their price 20%, and Little Weezer's keeps their price unchanged, which is most likely to occur?
A) The demand for Little Weezer's pizza will increase B) The demand for Pizza House pizza will decrease C) Both A and B D) None of the above
If left alone, a natural monopoly will
a. earn normal profits b. earn maximum economic profits c. produce where P = ATC d. face competition from new entrants e. go out of business
If the cyclical deficit shrank by $60 billion while the structural deficit increased by $35 billion, the total deficit
A. Grew by $95 billion. B. Fell by $60 billion. C. Grew by $25 billion. D. Fell by $25 billion.
What are the costs of capital mobility?
What will be an ideal response?