Suppose firms in a perfectly competitive industry are making economic profits. As a result I. new firms enter the industry. II. the market price falls. III. the economic profits of the existing firms decrease
A) I, II and III
B) I and II
C) II and III
D) I and III
A
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In a perfectly competitive market, a decrease in the market demand will ultimately lead to ________ firms in the market and a ________ market equilibrium quantity.
A) more; higher B) fewer; lower C) more; lower D) fewer; higher
If the U.S. dollar appreciates relative to the British pound, then we pay fewer dollars for a pound
Indicate whether the statement is true or false
If the Fed unexpectedly shifts to a more expansionary monetary policy, which of the following will most likely occur in the short run?
a. a decrease in the real interest rate b. an increase in unemployment c. a decrease in real GDP d. an increase in the nominal interest rate
Suppose that Deon places a $150 value on a new MP-3 player, and Juanita places a $140 value on it. The cost of the MP-3 player is $130 . Suppose the government levies a $15 tax on MP-3 players, which raises the price to $145 . What is the deadweight loss created by the tax?