Give two reasons why the long-run industry supply curve may slope upward. Use an example to demonstrate your reasons
1) Some resource used in production may be available only in limited quantities. 2) Firms may have different cost structures. The example provided in the text for the first reason is the market for farm products. As more people become farmers, the price of land is bid up since its supply is limited. As the price of farm land is bid up, the costs to all farmers in the market rise. The example used to support the second reason is the market for painters. Anyone can enter the market for painting services, but not everyone has the same costs because some painters work faster than others.
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Suppose that in the short run firms are making economic profit in a monopolistically competitive industry. Explain what will eventually happen in the long run
In your answer make sure to discuss demand, price and the relationship between price and average total cost.
In fiscal year 2014, the U.S. federal budget deficit amounted to about:
a. 1.2% of GDP b. 3.7% of GDP c. 4.5% of GDP d. 10% of GDP