In a perfectly competitive market that is in long-run equilibrium, a permanent leftward shift in the market demand curve
A) raises the price in the short run.
B) raises profits in the short run.
C) leads to new firms entering the market in the long run.
D) lowers the price at first but then raises it as firms leave the market.
D
You might also like to view...
Molly received an autographed poster of David Hasselhoff for her 21st birthday
Her friend Helga offered her $50 for the poster, but Molly refused to sell the poster even though she knows she would never pay that much to replace it if it was ever damaged or destroyed. Explain this inconsistency in Molly's behavior.
Briefly discuss the main advantage of the bimetallic standard over the gold standard
What will be an ideal response?
The demand for xenite ore is fixed over time and is given as:
q = 40 - P where q is the number to tons of ore produced and P is the price per ton of xenite ore. The marginal extraction cost is $15 per ton and is also constant over time. The total quantity of the resource currently known to exist is 53.29 tons. The interest rate is 10 percent. Using the Hotelling rule for an exhaustible resource, complete the following table. Time Period Price Marginal Cost q Cumulative Production Today 15 1 Year 15 2 Years 15 3 Years 15 4 Years 15 5 Years 15 6 Years 15 7 Years 40.00 15 0 53.29
Which of the following statements is false?
A) Consumers receive more consumers' surplus when tariffs do not exist. B) Producers receive more producers' surplus when tariffs do exist. C) A tariff results in a net loss to society. D) With a tariff, the gains to the winners are less than the losses to the losers. E) none of the above