Suppose a competitive market has a horizontal long-run supply curve and is in long-run equilibrium. If demand decreases, we can be certain that in the short-run,
a. at least some firms will shut down.
b. price will fall below marginal cost for some firms.
c. price will fall below average total cost for some firms.
d. at least some firms will enter the industry.
c
You might also like to view...
Suppose you read in the paper that the Federal Reserve plans to expand the money supply. The Fed is most likely to do this by
A) printing more currency and distributing it. B) purchasing government bonds from the public. C) selling government bonds to the public. D) buying newly issued government bonds directly from the government itself.
If purchases power parity exists and the exchange rate is 1.50 u.s. dollars per British pound, then a latte that has a price of $4.00 in Northridge, California, has a price of _ in London, England?
a. 8.00 pounds b. 4.00 pounds c. 6.00 pounds d. 2.67 pounds e. .38 pounds
In the late 1990s, aggregate demand was growing rapidly, but productivity grew even more rapidly. What happened to prices and output?
A. output went up a lot, prices went up some B. prices went up a lot, output went up some C. output went down, prices went up some D. both prices and output went down E. both prices and output remain unchanged
Refer to the figure below. What is the price elasticity of supply at point B and point C? 
A. 1; 1 B. 3; 2 C. 1/2; 3/4 D. 3/4; 1/2