The key assumption that distinguishes a constant cost industry from other types of industries is that
a. firms can earn only a normal profit in the long run
b. each firm's ATC curve is unaffected by changes in industry output
c. each firm has a horizontal long-run average total cost curve
d. there are no economies of scale available to the firms in the industry
e. each firm faces a horizontal demand curve for its output
B
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When the price rises and the supply curve does not shift, the firms' producer surplus ________. When the price falls and the supply curve does not shift, the firms' producer surplus ________
A) increases; decreases B) decreases; increases C) decreases; decreases D) increases; increases E) does not change; does not change
Discouraged workers are not counted as unemployed because they are working
Indicate whether the statement is true or false
If the government imposes an excise tax on a good, it will collect the most tax revenues from it if the demand for the good is:
A. Elastic B. Inelastic C. Unit elastic D. Perfectly elastic
Refer to Figure 4-1. If the market price is $1.50, what is the consumer surplus on the first burrito?
A) $0.50 B) $1.00 C) $1.50 D) $7.50