The entry of new firms into a competitive industry in the long run has the effect of
a. driving up long-run equilibrium price
b. eliminating economic profits
c. reducing equilibrium quantity
d. making the demand curve facing each firm more inelastic
e. shifting the cost curves for each firm by an amount equal to total cost divided by the number of firms
B
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In the period 1960–95, the cycles of upturns and downturns in the economy (booms and recessions)
(a) were eliminated as knowledge of how the economy operated grew. (b) continued to occur, although not nearly as severely as prior to World War II. (c) grew even worse than prior to World War II. (d) were equally as bad as the period prior to World War II.
A university raises annual tuition by 10 percent. No other events have occurred, and the university's revenues have increased. It must be TRUE that
A) the associated change in quantity demanded was smaller than 10 percent. B) the associated change in quantity demanded was equal to 10 percent. C) the associated change in quantity demanded was greater than 10 percent. D) there was no associated change in quantity demanded.