A sudden increase in the market demand in a competitive industry leads to
a) Losses in the short-run and average profits in the long-run
b) Above average profits in the short-run and average profits in the long-run
c) New firms being attracted to the industry
d) Demand creating supply
Answer: C
Economics
- If the Federal Reserve creates new money to finance the government's deficit, then it is monetizing the deficit.(True/False)
- If the current price is above equilibrium price in a competitive market, we should expect a shortage of the product.(True/False)
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- In cost-push inflation, prices go up because of higher cost of production.(True/False)
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- Prices help to determine the opportunity cost of a purchase.(True/False)
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- The demand curve for a firm in a competitive environment is_______.