An increase in market price, given a fixed number of firms, causes market supply to shift to the right.
Answer the following statement true (T) or false (F)
False
If price rises to create positive economic profits, new firms will enter the market. It is the increase in the number of firms that causes market supply to shift. With a fixed number of firms, an increase in price will affect quantity supplied only.
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The marginal propensity to consume (MPC) is the change in consumption divided by the change in saving
a. True b. False Indicate whether the statement is true or false
Holding all other forces constant, if decreasing the price of a good leads to an increase in total revenue, then the demand for the good must be
a. unit elastic. b. inelastic. c. elastic. d. None of the above is correct because a price decrease never leads to an increase in total revenue.