Refer to Figure 23.5 for a perfectly competitive firm. Given the current market price of $200, we expect to see
A. No change in the number of firms in the industry and no change in the market price.
B. Firms exit from the industry, driving down the market price.
C. Firms exit from the industry, driving up the market price.
D. Firms enter the industry, driving down the market price.
Answer: A
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In profit centers
a. Managers are difficult to evaluate because there is no simple metric of how well they performed b. Managers typically have the necessary information to run their division efficiently c. Managers' decisions rarely affect other divisions d. Managers typically do not have the incentives to run their division efficiently
In markets where the supply curve is vertical, changes in:
A. Demand will not cause the equilibrium price to change B. Supply will not cause the equilibrium price to change C. Demand will not cause the equilibrium quantity to change D. Supply will not cause the equilibrium quantity to change