If all firms in a market have the same LRATC curve,
a. only one of them can survive in the long run
b. the lowest possible long-run price is determined by LRATC at minimum efficient scale
c. the highest possible long-run price is determined by LRATC at minimum efficient scale
d. minimum efficient scale must be zero
e. there is no minimum efficient scale
B
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Firms in a monopolistically competitive market face ________ demand curves and earn ________ economic profits in the long run
A) downward sloping; zero B) downward sloping; positive C) horizontal; zero D) horizontal; negative
The table above gives data for the nation of Pearl, a small island in the South Pacific. If aggregate demand increases so that the quantity of real GDP demanded is $6 billion more at each price level, the new equilibrium real GDP is
A) $34 billion. B) $31 billion. C) $28 billion. D) $25 billion. E) $23 billion.
An increase in the number of firms causes the price firms are able to charge to fall, which results in a movement along the market supply curve.
Answer the following statement true (T) or false (F)
When economists say that a good is nonrival in consumption, they mean that:
A. no one wants the good. B. everyone wants the good. C. the good is widely available. D. more than one person can enjoy the good at the same time.