If the minimum efficient scale of production is small relative to the size of a market, then
a. the industry will tend to be highly concentrated
b. there will be much strategic interdependence among the sellers in the industry
c. the industry is unlikely to be an oligopoly
d. it is more likely that sellers in the industry will successfully collude
e. there will be much merger activity in the industry
C
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Workers in the United States receive significantly higher compensation than almost all other western European nations.
Answer the following statement true (T) or false (F)
If the price of a product increases by 5 percent and the quantity demanded decreases by 5 percent, then the elasticity of demand is
A) 0. B) 1. C) indeterminate. D) 5. E) 25.
Direct investment in the stock market by the Social Security trust fund
A) does not require that new money be brought into the system. B) would be more cost-effective than creating private accounts for each person in the Social Security system. C) would cause the government indirectly to own substantial parts of American companies. D) All of the above.
Assume a profit maximizing firm's short-run cost is TC = 700 + 60Q. If its demand curve is P = 300 - 15Q, what should it do in the short run?
A) shut down B) continue operating in the short run even though it is losing money C) continue operating because it is earning an economic profit D) Cannot be determined from the above information