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 ________."
decrease; increase; increase; decrease; zero economic profit
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Exchange rate changes are
A) not very volatile because of offsetting changes in demand and supply. B) very volatile because supply and demand changes reinforce each other. C) infrequent because the exchange rate rarely changes. D) not very volatile because of government intervention. E) very volatile because of government intervention in the market.
If a country's currency is "pegged" to the dollar, its exchange rate is
A) floating. B) flexible. C) undervalued. D) fixed.