The figure shows a graph with a horizontal axis labeled Quantity, and a vertical axis labeled Price. The intersection of the horizontal and vertical axes is labeled zero. One Price appears on approximately halfway up the vertical axis and is labeled $2,000. There is one vertical line and one downward-sloping line on the graph. The vertical line is labeled Supply and starts near the top of the graph, and approximately one third of the way to the right of the vertical axis, and ends at the horizontal axis. The downward-sloping line is labeled Demand. The line starts to the right of the vertical axis, above the price of $2,000. The line moves downward and to the right, passes through the Supply line at the coordinate for $2,000, and ends before reaching the horizontal axis. The diagram above depicts demand and supply curves in a city’s rental housing market. If a price ceiling of $1,000 is imposed on the market, which of the following will occur?

In the absence of market failures, a perfectly competitive market equilibrium is efficient for which of the following reasons?

In the absence of barriers to entry, a typical firm is currently in long-run equilibrium. Assume there is an increase in the market demand for the good that the firm is producing. Which of the following will happen in the long run?

An increase in the supply of coffee could be caused by

Gale Furniture uses labor, capital, and wood as inputs in its production of office desks. When Gale Furniture doubles the quantity of labor, capital, and wood, the quantity of office desks doubles. Gale Furniture’s production process is characterized by

Raheem is currently working as a financial analyst earning $75,000 a year and is considering quitting his current job to start an art gallery. The estimated annual revenue from the art gallery is $175,000. The annual cost of labor, advertising, and acquiring the art inventory is $125,000. What are Raheem’s accounting and economic profits if he opens the art gallery?

Which of the following indicates the presence of economies of scale as the quantity of output increases?

Suppose that the market supply curve for shoes is upward sloping and the market demand curve is downward sloping. How will the imposition of a sales tax on shoes affect the consumer surplus, the producer surplus, and the total surplus?

The figure shows a graph of 2 lines labeled Supply and Demand in the coordinate plane with the origin labeled 0. The horizontal axis is labeled Quantity, and the numbers 4, 6, and 8 are evenly spaced along the middle of the axis. The vertical axis is labeled Price, in dollars, and the numbers 4, 6, and 8 are evenly spaced along the middle of the axis, and the number 12 is indicated at the top of the axis. The supply line begins at coordinates 0,0 and moves upward and to the right. It passes through the coordinates 4, 4, 6,6, and 8,8 and continues a short distance upward and to the right and ends. The demand line begins at coordinates 0,12 and moves downward and to the right. It passes through the coordinates 4,8, 6,6, and 8,4 and downward and to the right and ends slightly above the horizontal axis to the right of 8. The two lines intersect at coordinates 6,6. Apples are produced in a perfectly competitive market with no government intervention. Which of the following price changes will cause the total economic surplus to increase for the apple market depicted in the graph provided?

Heggood, Inc., a perfectly competitive firm, produces hats using capital and labor purchased in competitive factor markets. If the demand for hats increases, Heggood, Inc. will