If firms in a competitive price-searcher market are incurring economic losses, which of the following scenarios would best describe the change existing firms (who are able to stay in the market) would face as the market adjusts to long-run equilibrium?
a. An increase in demand for each firm and lower prices.
b. A decrease in demand for each firm and lower prices.
c. An increase in demand for each firm and higher prices.
d. A decrease in demand for each firm and higher prices.
C
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A supply curve slopes upward because quantity supplied is higher when price is higher.
Answer the following statement true (T) or false (F)
Wobet is a small country that produces only steak and potatoes. Steaks have a price of $10 each and potatoes have a price of $1 each. Suppose that Wobet produces 10 steaks and 20 potatoes in 2010. Using ________, Wobet has GDP equal to ________
A) market value; 30 units B) a market basket; 30 units C) market value; $120 D) real value; $120 E) a price index; $120
Referring to Situation #1 suppose that you decide that you have to fire the first and the third executive without hiring any replacements
What would be the opportunity cost of the second executive's work? Explain why your answer is not the same as in the question above.
Figure 7.2 shows a monopolist's demand curve. The marginal revenue from selling the fourth unit is:
A. $8. B. $6. C. $4. D. $2.