Why does the government work to eliminate artificial barriers to entry?
What will be an ideal response?
Because if there are economic profits being earned in the industry, eliminating artificial barriers to entry will encourage more firms to enter the industry. The increase in competition is expected to decrease price to consumers and improve service.
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In the Cournot model, a firm maximizes profit by selecting
A) its output, assuming that other firms keep their output constant. B) its price, assuming that other firms keep their price constant. C) its output, assuming that other firms will retaliate. D) its price, assuming that other firms will retaliate.
An improvement in a firm's technology that improves productivity results in a(n):
a. leftward shift of the supply curve. b. upward movement along the supply curve. c. willingness to supply a larger quantity than before at any given price. d. downward movement along the supply curve.
Using the income approach, the smallest component in the calculation of GDP is:
a. net interest. b. rental income. c. profits. d. compensation of employees.
A firm's marginal rate of return on investment curve shows the amount
a. saved by the firm at each alternative interest rate b. invested by the firm at each alternative interest rate c. saved by the firm at each alternative rate of time preference d. invested by the firm at each alternative marginal resource cost e. saved by the firm at each alternative marginal revenue product of investment