In the long run, in a perfectly competitive industry:
A. economic loss tends to persist.
B. the number of firms in the industry will increase.
C. economic profit tends to persist.
D. economic profit and loss are driven to zero by entry and exit.
Answer: D
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Which of the following is not a potential result of a price floor?
A) excess supply B) price greater than free-market equilibrium price C) Lower quality inputs are used, which increases marginal cost. D) all of the above
Refer to the above payoff matrix for the profits (in $ millions) of two firms (A and B) making a decision to advertise or not. Which of the following is the outcome of the dominant strategy without cooperation?
A) Both firm A and firm B choose not to advertise. B) Both firm A and firm B choose to advertise. C) Firm A chooses to advertise while firm B chooses not to advertise. D) Firm A chooses not to advertise while firm B chooses to advertise.
Which of the following is a legal remedy for a breach of the contract between parties?
a. Liquidated damages b. Imprisonment c. Unitization d. Specificity
An increase in government purchases, an increase in the interest rate, and an increase in consumption all shift the aggregate expenditure line upward
a. True b. False