Perfectly competitive firms are earning economic profits at a market price of $10 and an average total cost of $8. If new firms enter and increase the average total cost for all firms, the market price will ________ until ________.
A) fall; it reaches $8
B) increase; it reaches $10
C) increase; economic profit is equal to zero
D) fall; economic profit is equal to zero
D) fall; economic profit is equal to zero
Economics
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The marginal external damages of pollution, MEDP, curve could also be viewed as the marginal benefits of pollution abatement.
a. true b. false
Economics
Which of the following will result from an epizootic affecting sheep reared for wool?
a. The epizootic would lower people's preference for woolen clothes. b. The price of new woolen clothes would rise. c. The epizootic would lower people's preference for synthetic coats. d. The production of new woolen clothes would rise.
Economics