If, regardless of price, the quantity supplied is a constant amount, then the supply curve is:
A. horizontal.
B. vertical.
C. upward sloping.
D. downward sloping.
Answer: B
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What are scarce resources? Why are economic agents concerned with the allocation of these resources?
What will be an ideal response?
In a contestable market with one firm in the market, the existing firm will
A) set its price equal to the monopoly price. B) set its price lower than the monopoly price. C) set its price higher than the monopoly price. D) have a demand curve that is horizontal at the price that will attract new firms to enter the market.
Oligopolies exist and do not attract new rivals because
A) of barriers to entry. B) there can be no product differentiation. C) of competition. D) the firms keep profits and prices so low that no rivals are attracted.
In the Ricardian model, if a country's trade is restricted, this will cause all EXCEPT which?
A) limited specialization and the division of labor B) reduced volume of trade and reduced gains from trade C) nations to produce inside their production possibilities curves D) a country to produce some of the product of its comparative disadvantage E) raised costs as more diverse product is produced internally