As new firms enter a competitive price-searcher market, it can be expected that
a. market price will increase.
b. the output of existing firms will increase.
c. profits of existing firms will increase.
d. market demand should decrease.
e. profits of existing firms will decrease
E
You might also like to view...
In the short-run Keynesian model where the marginal propensity to consume is 0.75, to offset an expansionary gap resulting from a $1 billion increase in autonomous consumption, taxes must be:
A. decreased by $1.33 billion. B. increased by $1 billion. C. increased by $1.33 billion. D. decreased by $1 billion.
IBM buys treasury bonds from the UK as part of its investment portfolio. This is an example of:
A. importing. B. foreign direct investment. C. exporting. D. foreign portfolio investment.
Refer to the graph below.
Productive inefficiency occurs at what point?
A. A B. B C. C D. D
Your local government needs to increase tax revenue. To increase tax revenue it can either increase the property tax on commercial property or increase the property tax on all property. The government wants to impose the smallest excess burden possible. Because the demand for commercial property is ________ elastic than the demand for all property, you recommend that local government increase the property tax on ________ property.
A. more; all B. more; commercial C. less; all D. less; commercial