Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.

Explain what a "perfectly contestable" market means. Give an example of a perfectly contestable market. Explain why the outcome in a perfectly contestable market is that firms produce efficiently

What will be an ideal response?

That Table 8.1 shows a short-run situation is evident from

A) the linear marginal revenue function. B) the constant price. C) the increasing marginal cost. D) the presence of positive costs at Q = 0. E) the absence of marginal values at Q = 0.