Refer to the scenario above. Which of the following will happen if the equilibrium price charged by the firm in the short run is $130?
A) The firm will earn positive economic profits and continue production.
B) The firm will incur a loss but continue production.
C) New firms will enter the industry in the long run.
D) All firms will incur losses in the long run.
B
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Bobby moves along an indifference curve for shirts and pants by increasing consumption of shirts and decreasing consumption of pants. As Bobby has more and more pants, the number of shirts he is willing to trade for yet another pair of pants
A) decreases. B) increases. C) does not change. D) initially decreases and then increases.
According to efficient market theory, which of the following can best predict the stock price of a particular company tomorrow?
A) a finance professor who knows a lot of investment theory B) a stock trader who has traded stocks for more than 10 years C) that company's employee who has inside information about the company D) none of the above: Everyone has an equal chance of predicting future stock prices