Assume a firm is operating in a purely competitive market facing an upward-sloping long-run supply curve
If the industry is currently making pure economic profit what adjustment processes would take place in this market? What would happen to the industry supply curve, equilibrium quantity and equilibrium price?
The economic profit would attract entry. However, as more firms enter the market this will drive up the costs of all the firms in the industry. This will then lead to a higher equilibrium quantity and a higher price in the market.
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The market produces too little of a good with ______.
a. adverse selection b. negative externalities c. positive externalities d. asymmetric information
Which of the following groups does not fit in with the others?
A. Illegal immigrants B. Undocumented workers C. Green-card holders D. Overstaying aliens
For a given supply elasticity, the more inelastic the demand for a good, the larger the share of the tax paid by the
A) buyers. B) sellers. C) participants other than the buyers and sellers. D) government. E) None of the above answers is correct.
Refer to Table 1-2. Using marginal analysis, by how many hours should Thuy Anh extend her flower shop's hours of operations?
A) 2 hours B) 3 hours C) 4 hours D) 5 hours E) 6 hours