Question

RUSH PLEASE

63. In a constant cost industry, if input demand increases, then input prices will

increase and a firm’s SR cost curves will shift upward.

increase, but a firm’s SR cost curves will remain constant.

remain constant and a firm’s SR cost curves will not shift upward or downward.

remain constant, but a firm’s SR cost curves will shift upward.

decrease and a firm’s SR cost curves will shift downward.

65. In the long run (i.e., given a time period of more than one year), perfect competition within a market and the ability of other firms to free enter or exit that market induce or “force” firms to

all of the conditions listed in all the other answers are achieved in the long run under perfect competition.

adopt the most efficient (cost minimizing) technology and input combination.

none of the other answers are correct.

earn zero economic profits.

sell its output to consumers at the lowest possible price.

67. Suppose that the snow shovel industry is a perfectly competitive, increasing cost industry and the initial SR and LR market equilibrium price and quantity are P₀ and Q₀. Suppose that the demand for snow shovels decreases. If the new SR equilibrium price and quantity are P_SR and Q_SR and the new LR equilibrium price and quantity are P_LR and Q_LR, then

P₀ > P_SR > P_LR and Q₀ < Q_SR < Q_LR.

P₀ > P_LR > P_SR and Q₀ > Q_SR > Q_LR.

P_LR= P₀ > P_SR and Q₀ > Q_SR > Q_LR.

P_SR > P_LR > P₀ and Q₀ < Q_SR < Q_LR.

P_LR > P₀ > P_SR and Q₀ > Q_SR > Q_LR

_68. Suppose that the cheese industry is a perfectly competitive, constant cost industry and the initial SR and LR market equilibrium price and quantity are P₀ and Q₀. Suppose that the demand for cheese increases. If the new SR equilibrium price and quantity are P_SR and Q_SR and the new LR equilibrium price and quantity are P_LR and Q_LR, then

P_LR > P₀ > P_SR and Q₀ > Q_SR > Q_LR.

P₀ = P_LR < P_SR and Q₀ < Q_SR < Q_LR.

P₀ = P_LR > P_SR and Q_LR < Q_SR < Q₀.

P₀ > P_SR = P_LR and Q₀ < Q_SR < Q_LR.

P₀ > P_LR > P_SR and Q_LR < Q_SR < Q₀.

69. Sources of monopoly power include

the control of raw materials.

all of the factors listed in the other answers are sources of monopoly power.

government controls and regulation, patents, licenses, franchises, and other legal arrangements.

increasing returns to scale (also known as economies of scale).

barriers to entry.

72. In general, if the monopoly equilibrium is at the price P_m and the quantity Q_m and the perfectly competitive market equilibrium is at the price P_c and the quantity Q_c, then

P_m = P_c and Q_m < Q_c.

P_m > P_c and Q_m = Q_c.

P_m > P_c and Q_m < Q_c.

P_m > P_c and Q_m > Q_c.

P_m < P_c and Q_m < Q_c.

73. Firms in a monopolistic competitive market or industry produce ______ product and usually earn ______ profits in the short run and ______ profits in the long run.

a differentiated, zero, positive.

an identical, positive, zero.

an identical, zero, zero.

a differentiated, positive, zero.

a differentiated, positive, negative.

Answer 1

63. C. In constant cost industry when output increases then demand for input increases. Increase in demand for input doesnot change the price level because it is a constant cost industry

65. C. In long run, all firms in perfect competition earns zero economic profit due to free entry and exit.

66.B. When demand decreases then it will lead to decrease in price and quantity in short run but in long run some firm will exit which will decrease the supply and shift the supply curve to the left leading to an increase in price compared to short run but less than initial equilibrium because of increasing cost industry which leads supply curve to be an upward sloping

68. B. When demand increases, then it will shift the demand curve of an industry towards right which lead to an increase in price level in short run and increase in quantity. In long run, new firms will enter which will increase the supply which will decrease the price equal to initial equilibrium price and quantity further increases

69. B Monopoly means single seller Which can either be created due to patent right, economies of scale or specific control of raw material