If firms in a monopolistically competitive industry are operating with positive economic profit, over time we would see
A) firms alter their advertising rates until they made at least normal profits.
B) some firms entering the industry, causing the market supply curve to shift to the right, lowering price.
C) some firms entering the industry, causing the demand curves of the existing firms to shift to the left.
D) some firms entering the industry, causing the demand curves of the existing firms to shift to the right.
Answer: C
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Suppose, in 2008, the federal debt was $5 trillion. That year, the United States ran a deficit of $455 billion. During the course of the year, the inflation rate was 3.8%. How much is the "inflation tax"?
What will be an ideal response?
Which of these situations produces the largest profits for oligopolists?
a. The firms reach a Nash equilibrium. b. The firms reach the monopoly outcome. c. The firms reach the competitive outcome. d. The firms produce a quantity of output that lies between the competitive outcome and the monopoly outcome.
The marginal social cost curve lies below the marginal private cost curve, with the vertical difference between the two curves representing the marginal external cost
Indicate whether the statement is true or false
In Exhibit 1, at what quantity and price have all the mutually beneficial opportunities of trade been reached between suppliers and demanders?
a. quantity of four and price of $4
b. quantity of three and price of $5
c. quantity of two and price of $6
d. quantity of one and price of $4