Assume that both the demand curve and the supply curve for MP3 players shift to the right but the supply curve shifts more than the demand curve. As a result
A) the equilibrium price of MP3 players will increase; the equilibrium quantity will decrease.
B) the equilibrium price of MP3 players may increase or decrease; the equilibrium quantity will decrease.
C) the equilibrium price of MP3 players will decrease; the equilibrium quantity will increase.
D) both the equilibrium price and quantity of MP3 players will decrease.
C
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In a perfectly competitive labor market, a profit-maximizing firm that is also perfectly competitive in the product market will:
a. face a perfectly inelastic supply curve of labor. b. pay a wage that is equal to the price of the product. c. pay a wage that is equal to the marginal product of labor. d. hire more units of labor than would a firm that sells its output in a monopoly market. e. pay a wage equal to the marginal factor cost.
Which of the following is the best example of "creative destruction"?
a. The imprudent use of a credit card by a family that already has a high level of debt. b. The virtual elimination of the film camera by the digital camera. c. The failure of a business because of poor management. d. The failure of a business because of higher cost resulting from government regulation.