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

Economics

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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.

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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)

Economics

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

Economics

When does market equilibrium change in a given market?

What will be an ideal response?

Economics