Author Question: As exit from a perfectly competitive industry that is currently unprofitable pushes up the market ... (Read 52 times)

lunatika · **on:** Jun 30, 2018

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.