Suppose a perfectly competitive industry is in long-run equilibrium. If a decrease in demand leads to a higher long-run price, we know that
A) this is a decreasing-cost industry.
B) this is an increasing-cost industry.
C) some firms will be losing money in the long run.
D) after further adjustments, price will fall to its original level.
A
You might also like to view...
High levels of inflation ________ the real value of money and, hence, ________ short-run equilibrium output.
A. reduce; increase B. increase; decrease C. increase; increase D. reduce; decrease
The discount rate
A) is determined by markets forces of demand and supply in the market for bank reserves. B) is set by the Board of Governors. C) is determined by investment banks. D) is determined by market forces of demand and supply in the credit market.
How does price elasticity affect the price-quantity combination and segment of the demand curve that the monopolist would prefer for price and output?
What will be an ideal response?
According to the infant-industry argument, protection should be withdrawn from an infant industry when the companies in the industry
A. are listed on the domestic stock exchange. B. become profitable. C. reach a sufficient size to compete with foreign firms. D. double their sales revenues.