Answer the following questions true (T) or false (F)
1. In an increasing-cost industry the long-run supply curve is upward sloping.
2. After an increase in demand in a constant-cost industry, firms will find themselves with higher average cost curves.
3. Competition has driven the economic profits in the video rental business to zero. Surya Bacha, who owns a video rental business, would be better off leaving the industry for another alternative.
1. TRUE
2. FALSE
3. FALSE
You might also like to view...
The situation in which a firm charges different prices for different blocks of output is referred to as:
A) first-degree price discrimination. B) second-degree price discrimination. C) third-degree price discrimination. D) fourth-degree price discrimination.
If income were distributed according to the egalitarian principle of "to each exactly the same," then one problem would be that
A) there would be little or no incentive for individuals to take risky, hazardous, or unpleasant jobs. B) individuals would have an excess desire to invest in their own human capital. C) too many individuals would want to take risky jobs. D) productivity levels would probably become too high.
Which of the following limits the price a monopolist charges?
a. patents b. copyrights c. competition from other firms d. market demand e. market supply
The money supply will grow even larger through deposit creation when
A. People decide to use cash instead of checks for transactions. B. Interest rates rise, causing people to move money out of banks and into bonds. C. Banks stop making new loans because they are too risky. D. Consumers, businesses, and government increasing their borrowing.