Assume that the medical screening industry is perfectly competitive. Consider a typical firm that is making short-run losses
Suppose the medical screening industry runs an effective advertising campaign which convinces a large number of people that yearly CT scans are critical for good health. How will this affect a typical firm that remains in the industry?
A) The firm's marginal revenue curve and average cost curve shift upwards in response to the increase in market price and advertising expenditure. The firm increases output until it starts breaking even.
B) The marginal revenue curve shifts upwards, the firm's output increases along its marginal cost curve, it expands production until it breaks even.
C) The firm's supply curve shifts right and its marginal revenue curve shifts upwards as the market price rises and ultimately the firm starts making profits.
D) The marginal revenue curve shifts upwards, the firm's output increases along its marginal cost curve, it expands production and eventually starts making profits.
B
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If an economy uses monetary policy as its stabilization tool, the real interest rate and thus ________-run economic welfare depend on that economy's ________ policy
A) short, monetary B) short, fiscal C) long, monetary D) long, fiscal
Which of the following kinds of agreements between two or more countries would be an example of a deep integration measure?
A) An agreement to reduce tariffs and quotas B) An agreement to unify customs forms in order to speed up cross-border traffic C) An agreement to impose the same limits on cartels and monopolies D) An agreement to reduce exports