After an increasing cost industry responds to an increase in demand, in the long run the equilibrium price will be ______ than before the demand increase
a. higher
b. lower
c. the same as
d. impossible to predict
A
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Let the production function be q = ALaKb. The function exhibits decreasing returns to scale if
A) a + b = 1. B) a + b > 1. C) a + b < 1. D) Cannot be determined with the information given.
When managers in oligopolistic firms make decisions that affect output or price, they must
A) also be sure they erect barriers to entry to prevent new entrants from affecting their plans. B) anticipate the reactions of their rivals and plan accordingly. C) register with the Antitrust Division of the Department of Justice. D) inform the regulators of their industry about their plans.
When markets open up to international trade, we know that total surplus will rise
a. True b. False Indicate whether the statement is true or false
Assume a company is at a point in production where marginal product is above average product. Which of the following must be true?
A. Marginal product must be rising. B. Diminishing marginal product must not have set in yet. C. Average product must be rising. D. All of these are true.