Show what happens to the industry equilibrium when new firms enter a perfectly competitive market in the long run.
What will be an ideal response?
The diagram of the process should be similar to Figure 10-7 in the text. The industry supply curve shifts outward and industry price falls.
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A recession is a slowdown in the rate of economic growth that
A) causes total income to fall even though total output has not declined. B) is unintended and therefore disappoints people's expectations. C) lowers the nominal level of gross domestic product. D) persists longer than one year. E) results in fewer people being employed.
On balance, markets do some things very well, and some things poorly
a. True b. False Indicate whether the statement is true or false
Among the most important demand side factors explaining homes prices would be the size of the
A. homebuyer's car. B. metropolitan area and home itself. C. home. D. metropolitan area.
In its long-run equilibrium, a firm in monopolistic competition
A) makes zero economic profit and operates with excess capacity. B) makes zero economic profit and produces above capacity output. C) makes a positive economic profit and operates with excess capacity. D) makes a positive economic profit and produces above capacity output.