How does the aggregate supply curve differ from a supply curve for, say, bananas?
What will be an ideal response?
The supply curve for bananas indicates the quantities that producers are willing to sell at various prices. The aggregate supply curve indicates the rate of inflation that results from various levels of output, relative to potential output. When output is at potential, the rate of inflation is independent, so the long-run aggregate supply curve is vertical. When output varies from potential output, the tightening or slackening of labor and other input markets causes inflation to rise or fall. The supply curve for bananas reflects costs of production. The aggregate supply curve shows that deviations from potential output cause the cost of production and, thus, the price of output to vary.
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Public policy responses to monopolies:
A. could aim to break up existing monopolies. B. always have more costs than benefits to society. C. always have more benefits than costs to society. D. never benefit society in the end.
How do we measure economic growth?
a. Increases in the price level, as indicated by the GDP chain price index. b. Increases in nominal GDP. c. Increases in real GDP. d. Increases in the labor force.
The entry of a second firm shifts the demand curve of the original firm to the left ?, so that at each price the original firm will sell a decreased quantity.
The entry of a second firm shifts the demand curve of the original firm to the
so that at each price the original firm will sell
quantity.
Prior to 1914, did antitrust legislation have much effect on monopoly power in the United States? Why or why not?
What will be an ideal response?