Refer to the data. Suppose that entry into the industry changes this firm's demand schedule from columns (1) and (3) shown to columns (2) and (3). Economic profit will:
A. fall by $10.
B. fall to $6.
C. increase by $10.
D. decline to zero.
D. decline to zero.
You might also like to view...
If a government imposed price ceiling legally sets the price of beef below market equilibrium, which of the following will most likely happen?
a. The quantity of beef demanded will decrease. b. The quantity of beef supplied will increase. c. There will be a surplus of beef. d. There will be a shortage of beef.
Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and reserve-related (central bank) transactions become more negative (or less positive). b. The GDP Price Index falls, and reserve-related (central bank) transactions remain the same. c. The GDP Price Index and reserve-related (central bank) transactions remain the same. d. The GDP Price Index rises, and reserve-related (central bank) transactions remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
Assume that the nominal exchange rate decreases by 4%. If prices (both domestic and foreign do not change), we know that
A) foreign goods are now relatively cheaper. B) foreign goods are now relatively more expensive. C) domestic goods are now relatively more expensive. D) both A and C
The money demand curve has a negative slope because
A) lower interest rates cause households and firms to switch from financial assets to money. B) lower interest rates cause households and firms to switch from money to financial assets. C) lower interest rates cause households and firms to switch from money to bonds. D) lower interest rates cause households and firms to switch from money to stocks.