Use the following graphs for a perfectly competitive market in the short run to answer the next question.
The graphs suggest that in the long run, as automatic market adjustments occur, the demand faced by the perfectly competitive firm will
A. shift up.
B. not shift.
C. slope downward.
D. shift down.
Answer: D
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In Figure 17.6, long-run economic growth implies a
A. Shift from AD1 to AD2. B. Move from point D to point C. C. Move from point A to point B. D. Shift from LRAS1 to LRAS2.
If the elasticity for computers at the current price is at 6.4, what would happen to total revenues if a computer manufacturer doubled its price?
(A) They would go up slightly. (B) They would double. (C) They would remain the same. (D) They would go down drastically.
In the long run, firms in a monopolistically competitive market
A) usually earn positive economic profits. B) always earn monopoly profits. C) usually earn economic losses. D) earn zero economic profits.