What serves as the supply curve for a perfectly competitive firm? Why is this supply curve upward-sloping, or why does it take a higher price to get a firm to produce and sell more output?
What will be an ideal response?
The supply curve for a perfectly competitive firm is its MC curve above the AVC. Diminishing returns cause the MC curve to increase. It therefore takes a higher price to induce a firm to produce and sell more output because the firm must cover its higher MC.
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When the AE curve shifts upward because the price level falls, the corresponding effect on the aggregate demand curve is
A) a shift rightward of the aggregate demand curve. B) a movement upward along the aggregate demand curve. C) a shift leftward of the aggregate demand curve. D) a movement downward along the aggregate demand curve. E) nothing because aggregate demand does respond to changes in the price level.
A strategy in which a player cooperates in the current period if the other player cooperated in the previous period, but the player cheats in the current period if the other player cheated in the previous period is called a
A) tit-for-tat strategy. B) trigger strategy. C) duopoly strategy. D) dominant firm strategy.
Refer to Figure 9-3. What is the reduction in value of consumer surplus after the imposition of the quota?
A) $8 million B) $26.25 million C) $27.75 million D) $30 million
In short-run macroeconomics equilibrium...
What will be an ideal response?