Gregory Mankiw] Principles of Microeconomics, Chapter 13 and 14 mid practises

When new entrants to a competitive market have higher costs than existing firms, what must be correct? a. Accounting profits will be the primary signal for entrance. b. Sunk costs become an important determinant of short-run entrance strategy. c. Market price must be rising. d. New firms expect that their costs will decrease very quickly. Consider a competitive market with a large number of identical firms. The firms in this market do not use any resources that are available only in limited quantities. In longrun equilibrium, how is market price determined? a. by demand b. by the minimum point on the firms' average total cost curve c. by the minimum point on the firms' average variable cost curve d. by the number of firms in the industry