How does the long-run supply curve differ from the short-run supply curve for a perfectly competitive firm? Explain your answer
What will be an ideal response?
In the short run, if price falls to a point on the marginal cost curve that lies below average variable cost curve, then the firm should shut down. The firm's short-run supply curve is therefore the portion of its marginal cost curve that lies above average variable cost curve. In the long run, however, the supply curve is the portion of its marginal cost curve that lies above average total cost. This is because all costs are variable in the long run. Hence, when price falls below the minimum average cost, it becomes unprofitable for the firm to continue operations and the firm exits the industry.
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Which of the following is an example of an intermediate good?
A. An antique car sold to the highest bidder B. A pair of skis sold by a sporting goods retailer to a skier C. The lumber produced by Boise Cascade and sold to a builder of old houses D. A share of IBM stock
The first union to organize workers across skills, industries, and regions was the
a. Knights of Labor b. Knights of Columbus c. American Federation of Labor d. Congress of Industrial Organizations e. Taft-Hartley
The time necessary to put a desired policy into effect once economists and policymakers acknowledge that the economy is in an expansion or a recession is called a(n): a. recognition lag
b. implementation lag. c. operational lag. d. administrative lag.
Suppose we observe that as a firm increases its price its total revenue decreases. Which of the following is a possible value of its price elasticity of demand?
A. 0.25 B. 0.5 C. 1 D. 2