Consider an industry that is in long-run equilibrium. An increase in demand leads to a decrease in the price of the good. We know that this is
A) a decreasing cost industry.
B) a constant cost industry.
C) an increasing cost industry.
D) not a competitive industry.
A
You might also like to view...
A. Distinguish between a tariff and a quota
b. In what ways are tariffs and quotas similar? c. In what ways are tariffs and quotas different? d. Why might a foreign producer prefer a quota rather than a tariff?
Initially, the economy is at point B on Figure 10-1 above. According to the Solow growth model, an increase in the output per capita without an increase in capital per worker is represented by ________ and could be the result of ________
A) the movement B to E; new technology discoveries B) the movement B to H; improved health and education per worker C) the movement B to C; an increase in the savings rate D) the movement B to F; a decrease in the savings rate
The higher the marginal income tax rate, the
a. higher the MPC out of disposable income. b. lower the MPC out of disposable income. c. higher the autonomous expenditure multiplier. d. lower the autonomous expenditure multiplier. e. None of the above
Using the concepts of aggregate demand and aggregate supply, explain how the economy reaches an equilibrium level of real GDP and price level