In the first graph below, illustrate the cost curves and demand conditions for a monopolistic ally competitive firm making short-run profits. In the second graph, illustrate what those conditions are most likely to be in the long run. Explain the major
differences in the two graphs.
What will be an ideal response?
In the short run, the firm can earn economic profits. In the long run, the potential for economic profits will be reduced as other firms enter the industry or compete more intensively with product differentiation and development. Only a normal profit is likely to be earned in the long run. Price will also be greater than the minimum of average cost.
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A repurchase agreement of government securities by the Fed
A) permanently increases bank reserves. B) temporarily increases bank reserves. C) permanently reduces bank reserves. D) temporarily reduces bank reserves.
From 1900 to 2013, real GDP per person has had two important attributes
A) It has grown substantially over time and there are small differences from country to country. B) It has grown unevenly over time in the U.S. but it has grown substantially. C) It has grown evenly over time in the U.S. and there are huge differences from country to country. D) It has fluctuated around a trend in the U.S. but it has not grown much for all the Southeast Asian countries. E) It has doubled in the U.S. but there have been many recession periods.
Schumpeter asserts all of the following except
(a) A strong middle class fosters growth in society's entrepreneurial base. (b) Entrepreneurs are the leading force behind technological advancement. (c) Invention and innovation are unnecessary in a growing economy. (d) Secured property rights encourage risk-taking entrepreneurial behaviors.
The table above gives the total cost information for Hank and Helen's cherry farm. They sell their cherries in a perfectly competitive market, where the price is $6.00 per pound. If Hank and Helen produce and sell 5 pounds of cherries, what is their total revenue?
Select one: a. $30 b. $6 c. $20 d. $28