A monopolistically competitive industry that earns economic profits in the short run will
A) experience a rise in demand in the long run.
B) experience the entry of new rival firms into the industry in the long run.
C) experience the exit of existing firms out of the industry in the long run.
D) continue to earn economic profits in the long run.
B
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Financing government expenditure through deficits rather than through taxes will lead to higher spending if
A) it results in crowding in. B) it results in crowding out. C) people are more aware of taxes than they are of deficits. D) people are more aware of deficits than they are of taxes.
The main reason that hyperinflation renders a currency worthless is that ________
A) the government cannot print money fast enough to keep up with the rising prices B) laws against raising prices are easily evaded C) reducing government expenditures is politically unpopular D) the government's "official" inflation rate is always a gross understatement E) as soon as inflation seems out of control, everyone knows that the currency will soon lose whatever value it has today
A perfectly competitive firm faces a downward sloping market demand curve
a. True b. False Indicate whether the statement is true or false
From 1970 to 1998 the U.S. dollar
a. gained value compared to the Italian lira because inflation was higher in Italy. b. gained value compared to the Italian lira because inflation was lower in Italy. c. lost value compared to the Italian lira because inflation was higher in Italy. d. lost value compared to the Italian lira because inflation was lower in Italy.