A firm operating in a perfectly competitive industry will continue to operate in the short run but earn losses if the market price is less than that firm's average total cost but greater than the firm's average variable cost

If some sellers exit a competitive market, how will this affect its equilibrium?

What will be an ideal response?

Refer to Figure 26-13. In the figure above, if the economy in Year 1 is at point A and is expected in Year 2 to be at point B, then the appropriate monetary policy by the Federal Reserve would be to

A) raise interest rates. B) lower income taxes. C) lower interest rates. D) raise income taxes.