Which of the following is true?
a. Industry structure determines firm conduct which in turn determines firms' performance
b. Industry structure determines firm performance which in turn determines firms' conduct
c. Industry conduct determines firm structure which in turn determines firms' performance
d. Industry performance determines firm conduct which in turn determines firms' structure
a
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Under a marginal cost pricing rule, a natural monopoly
A) makes a reasonable profit. B) makes an economic profit. C) earns accounting profits, but breaks even in economic terms. D) incurs an economic loss. E) makes a normal profit, but it cannot be determined whether or not it makes an accounting profit.
If, in response to an increase in the price of chocolate the quantity of chocolate demanded decreases, economists would describe this as
A) a change in consumer income. B) a decrease in quantity demanded. C) a decrease in demand. D) a decrease in consumers' taste for chocolate.