When economic profits are negative in a perfectly competitive industry,
a. we would expect the market supply curve to shift to the left as a result.
b. we would expect the market supply curve to shift to the right as a result.
c. we would not expect any change in the market supply curve to result.
d. we would expect that the market demand curve to shift left as a result
Question 2
Which of the following statements about equilibrium is true?
a. The positive and the normative attributes of equilibrium are similar.
b. The equilibrium price fails to redistribute goods in accordance to individual valuations.
c. Equilibrium refers to a state of complete happiness or fairness.
d. In equilibrium there are neither surpluses nor shortages.
