Suppose the Environmental Protection Agency uses a corrective tax to set a price for pollution. Under this policy, is the supply curve for pollution rights vertical or is it horizontal?

Figure 4.3 illustrates the demand for tacos. A decrease in the demand for tacos is represented by the movement from

A) point a to point b. B) point c to point b. C) D2 to D1. D) D0 to D1.

When entry barriers are low, firms in a competitive price-searcher market

a. can expect many new rivals to enter regardless of current profitability. b. can expect competing firms to enter the market if the activity is profitable. c. can never earn economic profit. d. will always be able to earn economic profit.