A firm in a perfectly competitive market
a. can raise the price to sell more but by selling more will end up earning less economic profit than it had earned before the price increase
b. can cut the price to sell more but by selling more will end up earning less economic profit than it had earned before the price cut
c. can increase its supply to lower the price and thereby raise its economic profit
d. can decrease its supply to raise the price and thereby raise its economic profit
e. is a price taker, that is, accepts the market price for its good as given
E
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Exchange rates affect:
I. international trade flows. II. international investment flows. III. corporate earnings. a. I b. II and III c. I and II d. I, II, and III
Hyperinflation
A) occurs in the United States during each business cycle. B) has never occurred in the United States. C) is a period of time when inflation exceeds 20 percent per year. D) happens in all countries at some time during their business cycle. E) occurs only in theory, never in reality.