If a perfectly competitive industry's long-run supply curve is downward sloping, we can conclude that input prices will:
a. increase as industry output increases.
b. decrease as industry output increases.
c. remain constant as industry output increases.
d. none of these conclusions can be drawn.
b
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Assuming that the total market size remains constant, a monopolistically competitive firm earning profits in the short run will find the demand for its product decreasing in the long run because
A) some of its customers have switched to purchasing the products of new entrants in the market. B) as the firm raises its price in the long run, it will lose some customers to new entrants in the market. C) its costs of production rises. D) new entrants into the market are more likely to have cutting edge products.
Refer to Figure 9.3. If the market is in equilibrium, total producer surplus is
A) $2. B) $3. C) $200. D) $400. E) $600.
Government-operated firms with monopoly power
a. will necessarily meet the criteria of economic efficiency, as long as price equals average total cost. b. will always be more efficient than private firms because they do not have to make a profit. c. are likely to be inefficient since some of the monopoly power is likely to serve the interests of the governmental managers and employees. d. are highly responsive to changes in the preferences of individual consumers since consumers are also voters.
Gertie saw a pair of jeans that she was willing to buy for $35. The price tag, though, said they were $29.99. Therefore:
A. Gertie should buy the jeans because the price is less than her reservation price. B. Gertie should buy the jeans because the price is more than her reservation price. C. Gertie should not buy the jeans because the price is not equal to her reservation price. D. Gertie should not buy the jeans because they will be of lower quality than she expected.