If a firm shuts down in the short run
A) it will lose its operating costs.
B) its losses will be equal to zero.
C) it will incur its fixed costs.
D) it will incur only its explicit costs.
C
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Fill in the blanks to complete the following statements
"Assume a perfectly competitive market is initially in long-run equilibrium. In the short run, a decrease in raw materials prices will cause the firm's average costs to ________. As a result, the profits of existing firms will ________. However, over the long run, this will cause the number of firms in the market to ________, and market price will ________ until firms once again earn a ________."
Suppose Lisa spends all of her money on books and bagels, and a bagel is an inferior good for her. When the price of coffee increases, the
A) consumption of coffee will fall. B) consumption of coffee will rise. C) consumption of coffee will not change. D) Not enough information.