Perfectly competitive firms are earning economic profits at a market price of $10 and an average total cost of $8. If new firms enter and increase the average total cost for all firms, the market price will ________ until ________.
A) fall; it reaches $8
B) increase; it reaches $10
C) increase; economic profit is equal to zero
D) fall; economic profit is equal to zero
D) fall; economic profit is equal to zero
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The Justice Department is most likely to oppose a proposed merger on the basis of the Herfindahl-Hirschman Index when the post-merger HHI is:
A) less than 100. B) less than 1000. C) between 1000 and 1800. D) greater than 1800.
Consider an industry that is in long-run equilibrium. An increase in demand leads to a decrease in the price of the good. We know that this is
A) a decreasing cost industry. B) a constant cost industry. C) an increasing cost industry. D) not a competitive industry.
Since 1930, U.S. agriculture employment
a. has decreased while agricultural output has increased. b. has increased while agricultural output also has increased. c. has decreased while agricultural output also has decreased. d. has increased while agricultural output has decreased.
The unemployment rate was increasing from 6 percent to 7 percent could be interpreted as an increase in the natural rate of
a. inflation. b. unemployment. c. economic growth. d. aggregate supply.