Assume a firm is operating in a purely competitive market facing an upward-sloping long-run supply curve
If the industry is currently making pure economic profit what adjustment processes would take place in this market? What would happen to the industry supply curve, equilibrium quantity and equilibrium price?
The economic profit would attract entry. However, as more firms enter the market this will drive up the costs of all the firms in the industry. This will then lead to a higher equilibrium quantity and a higher price in the market.
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Which of the following is an example of a bilateral aid?
a. A U.S. commercial bank loan to a Mexican investor b. The establishment of a Brazilian subsidiary by a German firm c. U.S. humanitarian aid to Somalia d. A trade credit extended to Morocco for the purchase of Iranian oil e. A World Bank loan to Kenya
If the demand for a good increases by more than the supply of the good increases, then the good's equilibrium price will __________ and its equilibrium quantity will __________
A) rise; fall B) rise; rise C) fall; fall D) fall; rise