The demand curve for the perfectly competitive industry normally slopes downward, unlike the perfect competitive firm. Why?
Each firm by itself is so small that if it alone were to double its output, the effect would hardly be noticeable. But if every firm in the industry were to expand its output, that would make a substantial difference. Customers can be induced to buy the additional quantities arriving at the market only if the price of the good falls.
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A production method that relies on large quantities of machines and equipment and smaller quantities of labor is referred to as a:
A) variable-input-intensive method of production. B) labor-intensive method of production. C) technology-intensive method of production D) capital-intensive method of production.
How does an increase in the price level result in higher interest rates?
A) It increases the real money supply. B) It decreases the real money supply. C) It increases the real money demand. D) It decreases the real money demand.