Refer to the table below. Suppose all firms in this industry have identical costs to this firm and are producing 15 units of output. One can predict that:QuantityTotal RevenueExplicit CostsImplicit Costs1050365157563620100937251251258301501619
A. old firms will exit the industry.
B. price must rise.
C. new firms will enter the industry.
D. firms will attempt to lower their implicit costs.
Answer: C
You might also like to view...
In what two ways can education contribute to economic growth?
What will be an ideal response?
Perfect competition ________ a fair outcome ________
A) achieves; because both the fair rules and fair results conditions are met B) achieves; because total surplus is maximized C) does not achieve; because entrepreneurs only earn a normal profit D) does not achieve; because firms must be price takers E) may achieve; if average total costs are minimized
Suppose you observe that output in an industry occurs on the inelastic part of the market demand curve. Which of the following can you conclude from this?
A. The industry is definitely behaving as a monopoly that is protected by barriers to entry. B. The industry is definitely not behaving as a monopoly that is protected by barriers to entry. C. The industry could be perfectly competitive. D. The industry is definitely not perfectly competitive. E. Both (a) and (d) F. Both (b) and (c) G. Both (b) and (d) H. None of the above
Which statement is true?
A. GDP can never be greater than NDP. B. NDP can never be greater than GDP. C. GDP and NDP are always equal. D. None of the statements are true.