Suppose the inverse market demand is given by P = 150 ? 2Q. If the incumbent continues to produce 10 units of output, which of the following equations best summarizes the potential entrant's residual demand curve?
A. P = 75 ? 0.5Q
B. P = 130 ? 2Q
C. P = 150 ? 4Q
D. P = 130 ? Q
Answer: B
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In which market structure do firms exist in very large numbers, each firm produces an identical product, and there is freedom of entry and exit?
A) monopoly B) oligopoly C) only perfect competition D) only monopolistic competition E) both perfect competition and monopolistic competition
Consider the following: The relative price of movies this year has
A) increased. B) decreased. C) stayed the same. D) Not enough information has been given to calculate an answer.
Can a firm experience diminishing returns in the long run?
What will be an ideal response?
The process by which inputs are combined, transformed, and turned into outputs is called
A. capitalization. B. outsourcing. C. production. D. technology.