Entry by new firms into a perfectly competitive industry
A. has no effect on existing firms.
B. results in higher output by existing firms in equilibrium.
C. results in lower output by existing firms in equilibrium.
D. results in no change in the market price or output.
Answer: C
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Risk-benefit analysis of chemicals is difficult because
a. there is a void in formal assessments of health and ecological risks b. perception of risk of chemical exposure is not always aligned with actual risk c. the estimation of social benefits is particularly daunting d. U.S. policy on toxic chemicals is not as well established as it is for policy on air and water quality e. all of the above
According to purchasing-power parity, if over the course of a year the price level in the U.S. rises more than in Japan, then which of the following falls?
a. the U.S. real exchange rate, but not the U.S. nominal exchange rate b. the U.S. nominal exchange rate, but not the U.S. real exchange rate c. the U.S. nominal exchange rate and the U.S. real exchange rate d. neither the real exchange rate nor the nominal exchange rate
When government inefficiencies exist and government officials can be bribed, then
A. property rights will be more secure since an official has been bribed to grant ownership to the business. B. a bribe will increase the cost of investing in capital. C. the country will have positive economic growth. D. dead capital will not exist.
Adverse selection can occur when
A) all persons involved in a transaction have full information. B) one person has information not available to others. C) post-agreement incentives result in workers shirking. D) nobody has any information about a particular product.