Answer the next question on the basis of the following information for a bond having no expiration date: bond price = $1,000; bond fixed annual interest payment = $100; bond annual interest rate = 10%. If the price of this bond falls by $200, the interest rate will

Competitive firms can earn positive profits in the

a. Long run only b. Long run and the short run c. Short run only d. All of the above

The management of a rental building faces a rent control situation, where it cannot charge more than $400 a month in rent on the apartment. The management knows that the apartments are high in demand and renters would be willing to be $1000 per month for them. The management will

a. Do nothing-it cannot violate the regulation b. Offer a bundle of both the apartment and furniture together for $1000 c. Offer the controlled rent but force the tenants to rent furniture from the management d. Both B&C