Why does entry into markets decrease firm profits?
What will be an ideal response?
Three reasons: 1) the market price drops; 2) the quantity produced by each firm decreases; and 3) entry may cause average cost per unit to increase.
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Most economists assume that the goal of elected officials is to promote the public interest
a. True b. False
Which of the following explains why a monetary policy in a nation with an exchange rate peg, such as Denmark, would NOT be possible?
a. The nation must keep its import tariffs in sync with the import tariffs of the nation to which it pegs. b. The nation must keep its price level and nominal interest rate equal to the price level and nominal interest rate in the nation to which it pegs. c. The nation must keep its taxes and budget deficit in sync with taxes and budget deficit in the nation to which it pegs. d. The nation is no longer able to print its own money, since it is using the currency of the nation to which it pegs.
Profit per unit is the difference between
A) average revenue and average total cost. B) marginal revenue and marginal cost. C) total revenue and total cost. D) average revenue and marginal cost.
A decrease in population can be expected to
a. raise land rent b. increase the supply of land c. decrease the demand for land d. increase the demand for land e. decrease the supply of land