As exit from a perfectly competitive industry that is currently ...

[lunatika]

As exit from a perfectly competitive industry that is currently unprofitable pushes up the market price, producers will move from a situation where price ____ average total cost to one where price ____ average total cost.
 a. exceeds; equals.
 b. is less than; equals.
  c. equals; is less than.
  d. equals; exceeds.

Question 2

When the demand curve is vertical and the supply curve is upward sloping,:
 a. a rise in the input price that increases marginal cost by 1, decreases the firm's profit by 1.
  b. a drop in the input price that lowers the marginal cost by 1, doubles the firm's profit.
  c. a drop in the input price that lowers the marginal cost by 1, decreases the output price by 1.
  d. a rise in the input price that increases the marginal cost by 1, doubles the output price.

[Anton]

Answer to Question 1

b

Answer to Question 2

C

[lunatika]

Excellent

[ktidd]

Gracias!