If firms in a monopolistically competitive market are earning negative economic profits, it is likely that:
A. firms will enter the market.
B. firms will exit the market.
C. the firms in the market will shut down immediately.
D. the firms in the market will expand to try to capture lower costs per unit.
B. firms will exit the market.
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The change in consumption divided by a change in disposable income is called the:
a. consumption function. b. marginal propensity to consume. c. marginal propensity to spend. d. spending function. e. changing propensity to consume.
Income tax reductions can increase the profitability of human capital to households
a. True b. False
The buying and selling of government bonds by the Fed is known as
a. open market operations b. federal bond operations c. treasury bond operations d. open bonds operations e. discount rate operations
In the situation described below, we would expect an:
It is the custom for paper mills located alongside the Layzee River to discharge waste products into the river. As a result, operators of hydroelectric power-generating plants downstream along the river find that they must clean up the river's water before it flows through their equipment. A. Overproduction of paper in the mills B. Underproduction of paper in the mills C. External cost resulting from the production of hydroelectric power D. Attainment of allocative efficiency in the market