Which statement is correct? The long-run supply curve for a purely competitive:
A. Decreasing-cost industry will be upward-sloping
B. Increasing-cost industry will be perfectly elastic
C. Increasing-cost industry will be upward-sloping
D. Increasing-cost industry will be less elastic than the short-run supply curve
C. Increasing-cost industry will be upward-sloping
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Government in the United States spends more as a percentage of GDP than in most other industrialized nations.
Answer the following statement true (T) or false (F)
If the Fed is concerned about a possible recession, it ________ the federal funds rate, which ________ the quantity of money and ________ the amount of bank loans
A) raises; decreases; decreases B) lowers; decreases; decreases C) lowers; increases; decreases D) raises; increases; increases E) lowers; increases; increases
Answer the following statements true (T) or false (F)
1. In the long run, under conditions of perfect competition, economic profits are eventually eliminated. 2. If the entry of new firms substantially raises demand for resources, two forces tend to eliminate economic profit in the long run: upward pressure on cost and downward pressure on price. 3. The more that firms advertise, the closer they get to perfect competition. 4. The lowest possible ATC curve is attained at the optimal scale of output. 5. If price equals marginal cost at the long-run equilibrium, this means that economic efficiency is being achieved.
Critics of real business cycle theory doubt the plausibility of ________
A) intertemporal substitution B) negative productivity shocks C) adaptive expectations D) a trade-off between work and leisure