If firms in a competitive price-searcher market are earning economic profits, which of the following scenarios would best describe the change existing firms would face as the market adjusts to long-run equilibrium?
a. An increase in demand for each firm and lower prices.
b. A decrease in demand for each firm and lower prices.
c. An increase in demand for each firm and higher prices.
d. A decrease in demand for each firm and higher prices.
B
You might also like to view...
If the exchange rate ________, the quantity of dollars demanded ________ and there is a movement up along the ________ curve for dollars
A) falls; increases; supply B) rises; increases; demand C) falls; decreases; demand D) rises; decreases; supply E) rises; decreases; demand
Refer to Scenario 10.7. Suppose that the firm chooses to produce 200 ink pads. At this level of output the demand for ink pads is
A) inelastic. B) unit elastic. C) elastic. D) unit elastic.
Economic rent is generally associated with
A. high wages. B. low wages. C. both high and low wages. D. neither high nor low wages.
An increase in the price of gasoline will
A. Shift the automobile supply curve to the left. B. Shift the automobile demand curve to the left. C. Shift the gasoline supply curve to the right. D. Shift the gasoline demand curve to the right.