In the long run when a perfectly competitive firm experiences positive economic profits,
A) firms exit the industry, the market supply curve shifts rightward, and the market price falls.
B) firms enter the industry, the market supply curve shifts rightward, and the market price falls.
C) firms exit the industry, the market supply curve shifts leftward, and the market price rises.
D) firms enter the industry, the market supply curve shifts rightward, and the market price rises.
B
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In the scenario above, as a result of increased advertising, Talbot's economic profit
A) decreases by $500. B) increases by $170. C) increases by $750. D) decreases by $100.
Which of the following best illustrates the concept of "derived demand"?
a. A decrease in the price of glass causes the demand for plastic to decrease. b. An increase in the demand for bread leads to an increase in the demand for flour. c. A decrease in the price of air travel leads to an increase in the quantity demanded of air travel. d. An increase in the demand for peanut butter leads to an increase in the demand for jelly.