Question
In: Economics
If a perfectly competitive industry is in long-run equilibrium, then which of the following is true?...
If a perfectly competitive industry is in long-run equilibrium, then which of the following is true?
a)Price equals minimum average cost.
b)Price equals minimum marginal cost
c)Accounting profits for all firms are zero
d)Economic profits for all firms are positive
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
Which of the following is true of a perfectly competitive firm in long-run equilibrium? A) it...
Which of the following is true of a perfectly competitive firm in
long-run equilibrium?
A) it will minimize its average total cost
B) the market demand curve is horizontal
C) the market supply curve is horizontal
D) marginal cost is minimized
E) it will charge a price above its marginal cost
Suppose that a perfectly competitive industry is in long-run equilibrium. Then the price of a complementary...
Suppose that a perfectly competitive industry is in long-run
equilibrium. Then the price of a complementary good decreases. Use
two graphs, one for the firm, and one for the industry (and words)
to explain what will happen in the short run, and then the long
run, to: a. The market demand curve? b. The market supply curve? c.
Market price? d. Market output? e. Representative firm output? f.
Representative firm profit?
At long-run equilibrium in a perfectly competitive industry the typical firm is breaking even in an...
At long-run equilibrium in a perfectly competitive industry the
typical firm is breaking even in an opportunity cost sense. T/F
Perfectly competitive markets include firms that have
significant market power, with one typically being the price
leader. T/F
In perfectly competitive markets, the individual firm’s demand
curve is flat, while the market demand curve is typically sloping
downward to the right. T/F
When a firm maximizes profits, its price is derived from where
marginal revenue crosses marginal cost (extend the...
Consider a perfectly competitive industry at a long-run equilibrium. a. Suppose there is a sudden change...
Consider a perfectly competitive industry at a long-run
equilibrium. a. Suppose there is a sudden change in consumer
preferences which increases the demand for the firm’s product. What
are the effects of the change on the equilibrium of an individual
firm in the short and the long run? Draw the graphs. Explain. b.
Suppose there is an adverse technological shock that increases the
cost of production of the firms in the industry. What are the
effects of the change on...
Assume that a perfectly competitive, constant cost industry is in a long run equilibrium with 60...
Assume that a perfectly competitive, constant cost industry is
in a long run equilibrium with 60 firms. Each firm is producing 90
units of output which it sells at the price of $41 per unit; out of
this amount each firm is paying $3 tax per unit of the output. The
government decides to decrease the tax, so the firms will be paying
$1 tax per unit.
a) Explain what would happen in the short run to the equilibrium
price...
Suppose that the restaurant market is a perfectly competitive industry in long run equilibrium. Each of...
Suppose that the restaurant market is a perfectly competitive
industry in long run equilibrium. Each of the identical restaurants
has the same (long run) cost function: T C = 225 + q 2 , where q is
the volume of sales by each establishment. Each of the identical
firms therefore have the same marginal cost: MC = 2q. (a) What is
the average cost function for the identical restaurants? (b) How
much does each individual firm produce in the long...
assume that a perfectly competitive ,constant cost industry is in a long run equilibrium with 20...
assume that a perfectly competitive ,constant cost industry is
in a long run equilibrium with 20 firms .
each firm is producing 150 units of output which it sells at the
price of R 20 per unit ,out of this amount each firm is paying R 4
tax per unit of the output .the government decide to abolish the
tax
a)Explain what would happen in the short run to the equilibrium
price and industry output,number of firms in the industry...
Assume that a perfectly competitive, constant cost industry is in a long run equilibrium with 60...
Assume that a perfectly competitive, constant cost industry is
in a long run equilibrium with 60 firms. Each firm is producing 90
units of output which it sells at the price of $41 per unit; out of
this amount each firm is paying $3 tax per unit of the output. The
government decides to decrease the tax, so the firms will be paying
$1 tax per unit.
a) Explain what would happen in the short run to the equilibrium
price...
Assume that the gold-mining industry is perfectly competitive. a) Illustrate a long-run equilibrium using diagrams for...
Assume that the gold-mining industry is perfectly competitive.
a) Illustrate a long-run equilibrium using diagrams for the gold
market and for a representative gold mine. b) Suppose that an
increase in jewelry demand induces a surge in the demand for gold.
Using your diagrams, show what happens in the short run to the gold
market and to each existing gold mine. c) If the demand for gold
remains high, what would happen to the price over time?
Specifically, would the...
Draw graphs showing a perfectly competitive firm and industry in the long-run equilibrium. a. How do...
Draw graphs showing a perfectly competitive firm and industry in
the long-run equilibrium.
a. How do you know that the industry is in long-run
equilibrium?
Long-run when quantity demanded=quantity supplied, no entry
and not exit as firms are breaking even. (Which holds true when the
P=ATC)
b. Suppose that there is an increase in demand for this product.
Show and explain the short-run adjustment process for both the firm
and the industry.
Market demand curve shifts to the right. Equilibrium...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Non-constant growth model: Do=$2.00 required return on equity= 5% g= 9% n=1,2 g=7% n=3,4 g=3% n=5...
- . Find all x ∈ Z143 such that x2Ξ 7 (mod 143). Please explain all steps...
- #Python: A palindrome is a sequence of characters that reads the same backwards as forwards. For...
- Explain an example in which a variable has two different addresses at different places in a...
- Hadley, a thirty-five-year-old physician, has worked at Princeton Plainsboro Hospital for six years. She recently received...
- QUESTION 1. For each of the following, state whether the occurrence of the variable x occurs...
- According to Mike Taft of RVK, the “Markets Group” is an important unit of the Federal...
ADVERTISEMENT