The market pricing system corrects an excess supply by
a. raising the product price and increasing producer profits.
b. lowering the product price and decreasing producer profits.
c. raising the product price and decreasing producer profits.
d. lowering the product price and increasing producer profits.
B
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One reason investors may prefer bonds over stocks is
a. potential profits are larger b. bond prices never vary c. bondholders get paid before stockholders d. owning bonds implies owning a part of the company e. interest rates do not affect the value of bonds
In which of the following market structures can firms earn economic profits in the long run?
a. perfect competition b. monopolistic competition c. monopoly d. Both b and c are correct.
Which one of the following is a source of conflict between owners and managers?
A. Managers and owners have a very short time horizon. B. Owners have short time horizons, while managers have to worry about future cash flows. C. Managers and owners worry about the entire future cash flows. D. Managers have short time horizons, while owners have to worry about future cash flows.
If the Fed has a strong preference for stable prices relative to output, the ________ curve is relatively ________.
A. AD; steep B. AS; steep C. AD; flat D. AS; flat