The presence of pollution in the dry cleaning industry leads in the long run to dynamic inefficiencies because
A) people will buy fewer clothes that need dry cleaning than they otherwise would have.
B) people will develop substitutes for dry cleaning that are wasteful.
C) firms will be induced to leave the industry because of artificially high costs.
D) firms whose average private cost is less than price will stay in (or enter) the dry cleaning industry even though their average social cost exceeds price.
E) firms whose average private cost exceeds the price will exit (or fail to enter) the dry cleaning industry even though their average social cost is less than price.
D
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Which of the following is a difference between a monopolistically competitive market and a perfectly competitive market in the long run?
A) Firms in a monopolistically competitive market earn zero economic profits in the long run, while firms in a perfectly competitive market earn positive economic profits in the long run. B) Firms in a monopolistically competitive market earn zero economic profits in the long run, while firms in a perfectly competitive market incur losses in the long run. C) Firms in a monopolistically competitive market charge a price higher than marginal cost in the long run, while firms in a perfectly competitive market charge a price equal to marginal cost in the long run. D) Firms in a monopolistically competitive market charge a price lower than marginal cost in the long run, while firms in a perfectly competitive market charge a price equal to marginal cost in the long run.
When the U.S. interest rate rises relative to that in other counties, in the foreign exchange market the demand for U.S. dollars ________ and the supply of U.S. dollars ________
A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases