If price is less than marginal cost, a profit-maximizing perfectly competitive firm should:
a. increase output.
b. decrease output.
c. decrease price.
d. increase price.
b
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What factors can cause the labor demand curve to shift?
Briefly discuss the determinants of supply other than price
What will be an ideal response?
The reason that unskilled construction workers typically receive higher wages than retail sales clerks is best explained by:
A. Discrimination B. Geographic immobilities C. Compensating differences D. Noncompeting labor groups
Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower