Refer to the above figure. As more and more firms are able to and actually do enter the industry, the demand curve of each firm and its marginal revenue curve
A) will shift inward until the demand curve is tangent to the average total cost curve.
B) will become vertical.
C) will become upward sloping.
D) None of the above will occur.
A
You might also like to view...
Explain the concept of consumer equilibrium
What will be an ideal response?
Hector's wealth is zero, he expects to work for another 45 years at a constant salary of $80,000 and live for another 60 years. If yearly taxes are $20,000 and Hector completely smooths consumption over his lifetime, his annual consumption is
A) $37,500. B) $45,000. C) $60,000. D) $70,000.
If currency outstanding equals $200 million, checkable deposits equal $1 billion, reserves equal $150 million, and the required reserve ratio is 0.10, the money multiplier equals
A) 0.86. B) 3.14. C) 3.43. D) 4.
An increase in government spending that is not financed by an increase in taxes will cause which of the following?
A) an increase in interest rates and an increase in planned investment B) an increase in interest rates and a reduction in planned investment C) a reduction in interest rates and an increase in planned investment D) a reduction in interest rates and a reduction in planned investment