An industry is in long-run competitive equilibrium. The price of a substitute good increases.
A. New firms will enter the market.
B. Firms will begin earning economic profit.
C. The product price will rise.
D. a and b
E. all of the above
Answer: E
You might also like to view...
As noted in the text, the major Japanese auto manufacturers agreed to "voluntary" import restrictions that reduced the number of cars they could ship to the U.S. market in the 1980s
One of the key outcomes from this policy is that the Japanese manufacturers were able to: A) focus on more profitable auto markets in other countries. B) raise their prices of autos in the U.S. market and capture higher profit margins on the imported cars. C) cut their costs by more than the import tariff, so profit per auto increased. D) all of the above
The demand curve for a monopolistic competitor is likely to be steeper than that of a monopolist.
Answer the following statement true (T) or false (F)