Question

price less than: A. P ATC 11. If this firm is in a constant-cost industry, the long AVC run equilibrium price is: 12. In the short run, what would be the price if the firm was indifferent to producing or shutting down? a, o, o,o, a 13. Assume the current price is P and the firm belongs A. firms will enter the industry and the long-run price will B. firms will enter this industry and the long-run price will C. firms will enter this industry and the long-run price will D. the number of firms won't change and price won't Quantity to an increasing-cost industry. In the long run: be P be less than Ps, but greater than P be less than P3. change. 14. Assume the current price is Ps and the firm belongs A. firms will enter the industry and the long-run price will B. C. D. to a decreasing-cost industry. In the long run: be Ps. firms will enter this industry and the long-run price will be less than Ps, but greater than P firms will enter this industry and the long-run price will be less than Ps the number of firms won't change and price won't 15. Assume the current price is Ps and the firm belongs A. firms will exit the industry and the long-run price will B. to an increasing-cost industry. In the long run: be Ps. firms will exit this industry and the long-run price will be greater than P2, but less than P. C. firms will exit this industry and the long-run price will be greater than Ps. the number of firms won't change and price won't change. D.

Answer 1

Answer 11:

Option C. In case of constant cost industry, the equilibrium will occur at minimum point of the long run average total cost curve, thus, long run equilibrium price will be P3 in case of constant cost industry.

Answer 12:

Option a. P1. At the minimum point of the average variable cost curve of the firm, the firm is indifferent between producing and not producing, thus equilibrium price will be P1.

Answer 13:

Option B. The increasing cost industry leads to an upward shift of the cost curves of the firms and thus long run equilibrium will occur at a price greater than P3 but less than P4.

Answer 14:

Option C. The decreasing cost industry leads to downward shift of the cost curves of the firm and thus leads to an equilibrium price which is less than P3 and new firms will enter the industry.