Is it true that in the long run it is impossible for firms functioning in a perfectly competitive market to earn positive economic profits? Explain your answer
What will be an ideal response?
No, even in a perfectly competitive market, firms may earn positive economic profits in the long run. This happens when firms do not have identical cost structures. For example, whenever there is an increase in demand for a good in the market, the price of the good goes u
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If your professor decided to give all of his students the highest grade in the class, would that affect your classmates' incentives to study?
What will be an ideal response?
If demand is taken into account, firms that use cost-plus pricing can adjust price by
A) letting sales fall, but hold the markup constant if demand falls. B) lowering markups on price-elastic goods and raising markups on price-inelastic goods. C) letting sales rise, but hold the markup constant if demand rises. D) raising markups on price-elastic goods and lowering markups on price-inelastic goods.
Suppose the price elasticity of demand for iPods is inelastic. What would you expect about the demand elasticity for workers producing iPods? Explain
What will be an ideal response?
A . What is the difference between common stock and preferred stock? b. If you are highly risk-averse, would you be more likely to invest in common stock or preferred stock? Explain