A perfectly competitive firm in a constant-cost industry produces 3,000 units of a good at a total cost of $36,000. The prevailing market price is $15
What will happen to the number of firms in the industry and to the industry's output in the long run?
A) The number of firms remains constant and the industry's output decreases.
B) The number of firms and the industry's output increase.
C) The number of firms remains constant and the industry's output increases.
D) The number of firms and the industry's output decrease.
B
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Which of the following statements is correct?
A) The demand curve of the perfectly competitive industry is elastic as are the demand curves facing the individual firms. B) The market demand curve of perfect competition is inelastic because the individual consumers are buying a homogeneous product. C) The market demand curve of the perfectly competitive industry is downward sloping while the demand curve of an individual firm is horizontal with a height equal to the product price. D) The market demand curve of the perfectly competitive industry is downward sloping, so the demand curves of the individual firms are also downward sloping.
The higher the expected rate of inflation,
A. the higher the real and nominal rates of interest. B. the higher is the real rate of interest. C. the lower is the nominal rate of interest. D. the lower is the real rate of interest.