If demand increases in a perfectly competitive market,
a. then, in the short run, existing firms will find their profits diminishing, or their losses increasing
b. existing firms will earn an economic profit
c. the market price will decrease
d. each firm will produce more along its short-run supply curve and total output will increase along the short-run market supply curve
e. quantity demanded will increase and quantity supplied will decrease
D
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When the Federal Reserve Banks decide to buy government bonds from banks and the public, the supply of reserves in the federal funds market ________.
A. increases and the federal funds rate increases B. decreases and the federal funds rate decreases C. increases and the federal funds rate decreases D. decreases and the federal funds rate increases
The pay-as-you-go nature of the Social Security system means that _____
a. current beneficiaries are paid out of general tax revenues b. current beneficiaries are paid out of the payroll taxes levied on current workers c. current beneficiaries are paid based on contributions made during their last five working years d. current beneficiaries are paid out of current earnings on the Social Security trust fund
A $0.2 trillion increase in government purchases increases the quantity demanded by $1.0 trillion, price level remaining constant. This additional spending reflects the _____ effect
a. recessionary b. expansionary c. simple spending multiplier d. income e. substitution
What is one of the traditional political uses of tariffs?
a. protection of borders b. protection of vested economic interests c. protection of military secrets d. protection of exchange rates