Exam 9: Aggregate Demand

Refer to Figure 23.4. In the long run, which of the following would not be expected?

The exit of firms from a market, ceteris paribus,

Minimizing average total cost always leads to the maximization of total profit.

If a new sushi restaurant opens, then

Technological improvements shift the average total cost curve and the marginal cost curve downward.

The market supply curve in a perfectly competitive market is usually

The marginal cost pricing characteristic of competitive markets permits society to efficiently answer the WHAT to produce question.

In Figure 23.3, diagram "a" presents the cost curves that are relevant to a firm's production decision, and diagram "b" shows the market demand and supply curves for the market. Use both diagrams to answer the following question: In Figure 23.3, at a price of p₂ in the long run

When economic profits exist in the market for a particular product, this is a signal to producers that

Refer to Figure 23.2 for a perfectly competitive firm. If this firm produces the level of output corresponding to point C in the short run, it will earn

In a competitive market,

Economic losses mean that firms will exit from a market in the short run.

Investment decisions are made on the basis of the relationship of price to

Maximizing profits per unit always leads to the maximization of total profit.

Marginal cost pricing results in the most desirable mix of goods and services from the consumer's standpoint because

One World View article is titled "Flat Panels, Thin Margins." New firms continue to enter the industry even though prices are falling because

Technological improvements cause

To maximize profits, a competitive firm will seek to expand output until

If the products of two firms are homogeneous, then they

Market supply is the horizontal sum of the individual MC curves above the AVC in a perfectly competitive market.