Assume that the LCD and plasma television sets industry is perfectly competitive. Suppose a producer develops a successful innovation that enables it to lower its cost of production. What happens in the short run and in the long run?
A) The firm will probably incur losses temporarily because of the high cost of the innovation, but in the long run it will start earning positive profits.
B) The firm will be able to increase its economic profits temporarily, but in the long run its economic profits will be eliminated as other firms copy the innovation.
C) Initially, the firm will be able to increase its profit significantly, but in the long run its profits will still be greater than zero but lower than its short-run profits because other firms would also innovate.
D) This firm will be able to earn above normal profits indefinitely if it obtains a patent for its innovation.
B
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The perfectly discriminating monopolist will produce the
(a) quantity at which average cost exceeds marginal revenue. (b) quantity at which marginal cost equals average cost. (c) quantity at which marginal revenue equals marginal cost. (d) quantity and price which is not necessarily profit-maximizing but in the best interest of society at large, even if it means loss.
Currently, about ____ of U.S. households own stock, either directly or through an equity mutual fund
a. 10 percent b. 20 percent c. 50 percent d. 80 percent