If firms in a monopolistically competitive market are earning economic profits greater than zero in the short run, then in the long run:
A. firms will exit this market.
B. profits will increase.
C. profits will decrease.
D. demand will not change.
Answer: C
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The total revenue curve of a perfectly competitive firm
a. is horizontal b. is vertical c. has a diminishing slope as output increases d. has an increasing slope as output increases e. has a constant slope as output increases
If potential output is less than actual output, eventually the short-run aggregate supply curve will shift:
A. down and eliminate the recessionary gap. B. up and eliminate the recessionary gap. C. down and eliminate the inflationary gap. D. up and eliminate the inflationary gap.
When does market equilibrium change in a given market?
What will be an ideal response?
By reducing consumption expenditures, poor nations should be able to completely finance their own capital investment.
Answer the following statement true (T) or false (F)