Which of the following is a justification for infant industry protection?
a. The firm's learning must shift its average cost curve down over time so that it becomes competitive at world prices.
b. The firm's output must increase so that it moves down along its average cost curve over time and becomes competitive at world prices.
c. The firm's total cost curve must shift leftward over time so that it becomes competitive at world prices.
d. The firm's learning allows it to produce more output and take advantage of increasing returns to scale.
Answer: a. The firm's learning must shift its average cost curve down over time so that it becomes competitive at world prices.
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In which of the following cartels is total cartel profit likely to be the highest?
A) a cartel made up of firms of various sizes each producing the same quantity of a differentiated product B) a cartel made up of identical firms each producing the same quantity of a homogeneous product C) a cartel made up of equal sized firms each producing different quantities of a differentiated product D) a cartel made up of firms of various sizes each producing different quantities of a homogeneous product
The calculation of the responsiveness of suppliers to changing prices is represented by
a. cross elasticity b. supply elasticity c. the supply coefficient d. long-run supply e. market-day supply