The number of firms in a perfectly competitive market:
A. varies in the short run.
B. is the same at all possible long-run equilibria.
C. is fixed in the long run.
D. is fixed in the short run.
Answer: D
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
Refer to Table 18-10. A tax exemption is granted for the first $10,000 earned per year. Suppose you earn $75,000
a. What is the amount of taxes you will pay? b. What is your average tax rate? c. What is your marginal tax rate?
Each ounce of salt is chemically identical to every other ounce. Why then, does the Morton brand salt sell at your supermarket for a higher price than the store brand?
Figure 5-17
In Figure 5-17, the consumer would prefer
a.
D to C.
b.
B to D.
c.
C to B or A.
d.
D to A but not B.