A.)What will a monopoly do in the long run if its profits are below normal?

Select one:

a.It will reduce price

b.It will increase quantity produced

c.It will raise price

d.It will go out of business

B.)Suppose that the government provides subsidies to the owners of apartment buildings (the subsidy helps pay part of the cost of operating an apartment building). What effect will these subsidies have?

Select one:

a.Rents will decrease and the equilibrium quantity of apartments will also decrease

b.Rents will increase but the equilibrium quantity of apartments will decrease

c.Rents will decrease but the equilibrium quantity of apartments will increase

d.Rents will increase and the equilibrium quantity of apartments will also increase

C.)If firms in a perfectly competitive market are making above-normal profits in the short run, what would happen in the long run?

Select one:

a.Demand would decrease

b.Supply would decrease

c.Demand would increase

d.Supply would increase

D.)Suppose that, responding to consumer complaints about the high price of gas, the state of North Carolina imposes a price ceiling in the market for gasoline. What is the most likely result of this price ceiling?

Select one:

a.the profits of sellers of gas in North Carolina will increase

b.the quantity of gas sold in North Carolina will increase

c.there will be a shortage of gas in North Carolina

d.consumers will more easily be able to buy gas in North Carolina

E.)Suppose the market for plain white t-shirts is perfectly competitive and in long-run equilibrium. Now suppose the demand for plain white t-shirts increases. When the market for plain white t-shirts reaches a new long-run equilibrium, how will the market compare to the market before the increase in demand?

Select one:

a.The profits of t-shirt makers will be higher than before the increase in demand; other than that, the market will be exactly the same as the market before the increase in demand

b.The supply of t-shirts will be higher than before the increase in demand; other than that, the market will be exactly the same as the market before the increase in demand

c.The price of t-shirts will be higher than before the increase in demand; other than that, the market will be exactly the same as the market before the increase in demand

d.the market in the new long-run equilibrium will be exactly the same as the market before the increase in demand