Innovations that lower production costs or create new products:
A. are rare in competitive industries.
B. discourage new firms from entering the industry.
C. often generate short-run economic profits that do not last into the long run.
D. usually generate long-run economic profits for the innovator.
Answer: C. often generate short-run economic profits that do not last into the long run.
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Whenever there is adverse selection without signaling or screening, there will be a missing market.
Answer the following statement true (T) or false (F)
John either buys a steak or chicken when dining out. John's marginal utility for steak and chicken is given in the above table
If the price of a steak is $5 and the price of a chicken is $5 and John has $25 to spend on the two goods, what combination of steak and chicken will John consume to maximize his utility? A) 1 steak and 4 chickens B) 3 steaks and 2 chickens C) 4 steaks and 3 chickens D) 5 steaks and 6 chickens
In general, the only thing that can cause a sustained increase in the rate of inflation is: a. a high rate of growth in the supply of money. b. a significant increase in unemployment
c. a decrease in real GDP. d. an increase in federal income taxes.
Another expression for disposable income would be
a. income left over after subtracting deductions such as 401Ks and health insurance b. income left over after subtracting taxes c. income left over after subtracting fixed payments like rent or car payments d. income left over after subtracting all required spending items such as food, utilities, etc. e. income left over after subtracting transfer payments