What would be the long-run equilibrium result of output expansion in a decreasing-cost industry?
An expansion in the output of a decreasing-cost industry can lead to a reduction in input costs and shift the MC and ATC curves downward, and the market price falls. Effectively, a firm experiences lower cost as an industry expands. The new long-run market equilibrium has more output at a lower price. The long-run supply curve is downward sloping.
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In the short run when prices don't have enough time to change, the Federal Reserve
A) can influence the level of interest rates in the economy but generally will not because it would be destabilizing. B) can only affect the amount of money in the economy. C) can influence the level of interest rates in the economy. D) cannot influence the level of interest rates in the economy.
An inferior good has an income elasticity of demand that is
A) positive. B) negative. C) positive but less than 1. D) zero.
Why is market definition important for economic decision making?
A. Government regulators are interested in knowing the effect of mergers and acquisitions on competition and prices in a particular market. B A firm will define its market in order to maximize revenue. C. A firm is interested in knowing its actual and potential competitors. D. both A and C E. both A and B
If a leader wanted to show how many weapons she would have to give up in order to increase food production to a certain level, she could use a(n) ______.
a. production possibilities curve b. circular flow diagram c. demand curve d. interest calculator