In an increasing-cost industry, the entry of new firms
a. decreases equilibrium price
b. increases average cost at each level of output
c. shifts the industry demand curve to the left
d. increases economic profits in the industry
e. shifts the long-run industry supply curve to the right
B
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College students and faculty members have a more elastic demand than the general public for Apple's iMac desktop computers. From this we can conclude that
A) Apple will earn economic profits from the computers it sells to the general public but will break even on the computers it sells to college students and faculty members. B) Apple will charge college students and faculty members lower prices than it charges the general public. C) the general public will earn arbitrage profits by buying iMac desktop computers from Apple and reselling them to college students and faculty members. D) Apple will charge college students and faculty members higher prices than it charges the general public.
In the aggregate demand/aggregate supply model, an increase in a country's sustainable potential output is represented by
a. an increase in aggregate demand. b. a decrease in aggregate demand. c. an increase in long-run aggregate supply. d. an increase in the general level of prices.