When an industry supply curve increases enough to erase economic profits,
a. weaker firms exit the industry
b. quantity demanded decreases, but only slightly
c. all firms in the industry incur economic losses
d. entry of new firms and expansion of existing firms stop
e. marginal revenue increases
D
You might also like to view...
A feature of imperfect competition is _________, which means that as the firm expands its production, average costs of production fall. Therefore, the firm can _______ its costs of production by selling internationally.
a. economies of scale; decrease b. economies of scale; increase c. increasing returns to scale; decrease d. specialization; increase
When the nation of Mooseland first permitted trade with other nations, domestic producers of sugar experienced a decrease in producer surplus of $5 million and total surplus in Mooseland's sugar market increased by $2 million. We can conclude that
a. Mooseland became an exporter of sugar. b. the overall economic well-being of participants in the sugar market in Mooseland fell because of trade. c. consumer surplus in Mooseland increased by $7 million. d. the opening of trade caused the domestic demand curve for sugar in Mooseland to shift to the right.