Entry of new firms into a perfectly competitive market raises the product's price
Indicate whether the statement is true or false
FALSE
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
A firm that is first to the market with a new product frequently discovers that there are design flaws or problems with the product that were not anticipated. How do these problems affect the innovating firm?
A) The firm is protected by a first-mover advantage: initial design flaws tend not to harm a firm significantly because consumers resist changing products for fear of incurring high switching costs. B) They reduce profits for the new innovations and open the door to competitors who can enter the new market with a better product. C) The firm's cost increases as it improves the product but it will not be able to raise its price for fear of alienating customers. Consequently, its profits will erode although its market share remains secure. D) Because these design flaws were not anticipated, consumers tend to be more forgiving and are likely to remain loyal to the company and its products.
The Safe Drinking Water Act Amendments of 1996
a. govern U.S. water quality today b. established the Drinking Water State Revolving Fund (DWSRF) c. call for setting drinking water standards that are solely benefit based d. all of the above e. (a) and (b) only
Figure 17-4
In , the equilibrium price of Dominican pesos is Pe. If the Dominican Republic government fixes the price of foreign currency in terms of domestic currency at Pf (below equilibrium), what does the quantity Qd through Qs represent?
a.
the quantity of Dominican exports
b.
a shortage of foreign exchange
c.
the quantity of Dominican imports
d.
a surplus of foreign exchange