In a long-run perfectly competitive equilibrium,
a. marginal cost and marginal revenue are the greatest distance apart
b. barriers to entry are established by entrenched firms
c. the typical firm will earn an economic profit
d. average total cost is rising
e. price and marginal cost are equal to minimum short-run and long-run average total cost
E
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Contractionary fiscal policy includes
A) increasing taxes and increasing government purchases. B) raising interest rates, increasing taxes, and decreasing transfer payments. C) increasing taxes and decreasing government expenditures. D) raising interest rates, decreasing taxes, and decreasing government spending.
Consider the short-run supply curve for a perfectly competitive industry. In general, which of the following statements are true?
A. The industry supply curve tends to be flatter (more elastic) than the horizontal sum of all the industrial firms' supply curves. B. The short-run industry supply is obtained by horizontally summing the supply curves of all the individual firms in the industry. C. Short-run supply for a perfectly competitive industry is flat for constant cost industries. D. both a and b E. none of the above are true in general