The Monetarists argue that in the long run, the Phillips Curve is vertical because

If marginal cost exceeds average variable cost but is less than average total cost, then as output increases average total cost ________ and average variable cost ________

A) increases; decreases B) decreases; decreases C) increases; increases D) decreases; increases

Assume that the medical screening industry is perfectly competitive. Consider a typical firm that is making short-run losses

Suppose the medical screening industry runs an effective advertising campaign which convinces a large number of people that yearly CT scans are critical for good health. How will this affect a typical firm that remains in the industry? A) The firm's marginal revenue curve and average cost curve shift upwards in response to the increase in market price and advertising expenditure. The firm increases output until it starts breaking even. B) The marginal revenue curve shifts upwards, the firm's output increases along its marginal cost curve, it expands production until it breaks even. C) The firm's supply curve shifts right and its marginal revenue curve shifts upwards as the market price rises and ultimately the firm starts making profits. D) The marginal revenue curve shifts upwards, the firm's output increases along its marginal cost curve, it expands production and eventually starts making profits.