Suppose a perfectly competitive market is in short-run equilibrium. Firms that are incurring a ________ economic loss ________
A) persistent; increase their output to increase their profit
B) temporary; exit the industry
C) temporary; decrease their production but definitely stay open
D) persistent; exit the industry and shift the market supply curve leftward
E) persistent; exit the industry and shift the market supply curve rightward
D
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Refer to Scenario 12.2. In this game, Eliza's tough strategy would lead to her preferred equilibrium of
A) Eliza donates a kidney and Jerome does not. B) both Eliza and Jerome donate a kidney. C) Jerome donates a kidney and Eliza does not. D) neither Eliza nor Jerome donates a kidney.
If Croatian firms can make 600 pitchforks or 100 hammers in a week and Slovenian firms can make 200 pitchforks or 200 hammers in a week, then
A) the costs of production differ in each country. B) the Croats have an incentive to specialize in hammers. C) the Slovenes have an incentive to specialize in pitchforks. D) all of the above are true.