Suppose a firm operates in the short run at a price above its average total cost of production. In the long run the firm should expect
a. new firms to enter the market.
b. the market price to rise.
c. its profits to rise.
d. Both b and c are correct.
a
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"If Mexico is currently operating at a point inside its production possibilities frontier, then there are unemployed or misallocated resources in Mexico." Is this statement true or false? Briefly explain your answer
What will be an ideal response?
When economic profits are zero for a firm in a perfectly competitive market, it means that:
A. average total costs are zero. B. price is equal to minimum average total cost. C. average variable costs are minimized. D. MR is equal to AVC.
The four central issues in economics include all of the following questions except
a. who produces what b. how are goods produced c. when are goods produced d. who consumes what e. who decides about production and consumption
Planned aggregate expenditure equals consumption plus planned investment.
Answer the following statement true (T) or false (F)