With No Barriers to Entry or Exit and When Firms

question 89

Multiple Choice

With no barriers to entry or exit and when firms in a market are operating at a loss,we can expect other firms to exit,causing the ________ curve to shift to the ________ and making the equilibrium price ________ and the equilibrium quantity ________.

• A) demand; right; increase; increase
• B) demand; left; decrease; decrease
• C) supply; right; decrease; increase
• D) supply; left; increase; increase
• E) supply; left; increase; decrease

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Definitions:

Environmental Protection Agency

A U.S. federal agency responsible for creating and enforcing regulations that protect the environment and public health.

Aggregate Demand

The total call for goods and services within an economic system, set at a universal price level for a particular time slot.

Government Purchases

Expenditures by government entities on goods and services that contribute to a country's gross domestic product (GDP).

Nominal Interest Rate

The interest rate before adjusting for inflation, representing the surface rate at which interest is paid by a borrower for the use of money.