Suppose that the normal rate of return in the inkjet printer industry is 10% and the return being earned by firms in this industry equals exactly 5%. Which of the following is likely to follow from this scenario?

A. New firms will want to enter the industry.
B. The normal rate of return will fall to 5% in the long run.
C. Firms will collude to keep competition out.
D. Firms will want to leave the industry.


Answer: D

Economics

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Refer to the table below. If at the current advertising level, A = $9,800, B = $15,200, and C = $8,000, to maximize profit, which of the following should the firm do?


The table above shows the current costs for a firm to advertising on the radio, television, and newspaper.

A) The firm should decrease its advertising on the radio and increase its advertising in newspapers.
B) The firm should decrease its advertising on the television and increase its advertising in newspapers.
C) The firm should increase its advertising on the television and decrease its advertising in newspapers.
D) The firm should decrease its advertising on the radio and increase its advertising on television.

Economics

Collusion benefits cartel members by ______ in their industry.

a. reducing uncertainty b. increasing competition c. reducing prices d. increasing output

Economics

Determine whether each of the following is a positive or normative statement. (a) The Fed should lower interest rates to increase economic growth, because we're in a recession. (b) Higher government budget deficits cause higher interest rates

(c) The trade deficit should decline because of the fall in the value of the dollar. (d) Because of our high inflation rate, we must reduce the rate of money growth. (e) A generous unemployment insurance system is a primary cause of high unemployment in Europe. (f) Increased average labor productivity in a country should lead to faster growth. (g) Government budget deficits are too high in the United States and should be reduced.

Economics