Refer to the graph below for a purely competitive firm operating at a loss in the short run. Which of the following changes in its market would allow the firm to earn positive profits again?
A. An increase in the market demand
B. An increase in the wages of workers in the industry
C. A decrease in the price of raw materials used by firms in the industry
D. A decrease in the price of the industry's product
A. An increase in the market demand
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Classical economists tend to
A) support Say's law. B) see unemployment as a persistent economic problem. C) reject the equality of savings and investment. D) believe in Keynesian economics.
Explain how the marginal product and average product of labor change as the labor employed increases (a) initially and (b) eventually
What will be an ideal response?
A single-price monopolist is inefficient because
A) MR = MC. B) P > ATC. C) it creates a deadweight loss. D) it increases producer surplus.
What is the price elasticity of demand and how is it measured?
What will be an ideal response?