A constant-cost, perfectly competitive market is in long-run equilibrium. At present, there are 1,000 firms each producing 400 units of output. The price of the good is $60
Now suppose there is a sudden increase in demand for the industry's product which causes the price of the good to rise to $64. In the new long-run equilibrium, how will the average total cost of producing the good compare to what it was before the price of the good rose?
A) The average total cost will be the same as it was before the price increase.
B) The average total cost will be lower than it was before the price increase because of economies of scale.
C) The average total cost will be higher than it was before the price increase because of diseconomies of scale arising from the increased demand.
D) The average total cost will be higher than it was before the price increase since the increase in demand will drive up input prices.
A
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Possible benefits of a monopoly include which of the following (choose all that apply)? a. a savings of fixed costs because only one firm supplies quantity demanded
b. greater opportunities for research due to long-run positive economic profits. c. government regulation is more effective because the firm is "too big to fail.". d. goods and services are provided at a lower price than under perfect competition because of a monopoly's decreasing average cost curve.
Which of the following types of unemployment is the hardest to reduce?
a. Cyclical unemployment b. Structural unemployment c. Voluntary unemployment d. Frictional unemployment e. Seasonal unemployment