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Question 21 0.4 pts The market for candles is perfectly competitive and is currently in equilibrium. What will happen if candles are later linked to more houses catching on fire? In the short run, firms will incur economic losses, but in the long run, firms will enter the market, bringing economic profits back up to zero In the short run, firms will experience economic profits, but in the long run, firms will enter the market, bringing economic profits back down to zero In the short run, firms will experience economic profits, but in the long run, firms will leave the market, bringing economic profits back down to zero. In the short run, firms will incur economic losses, but in the long run, firms will leave the market, bringing economic profits back up to zero O In both the short run and the long run, firms will experience zero economic profits. Question 22 0.4 pts Firm A prices its products so low that it drives competitors out of the market. After all of its competitors have been driven out of the market, Firmm A raises prices significantly. The fact that Firm A_i evidence of anticompetitive behavior, lowered prices drove competitors out of the market competed with other firms on price O lowered its price below average variable cost in an effort to drive competitors out of the market and then subsequently increased price raised prices significantly

Answer 1

21) in the short run firms will incur economic losses but in the long run firms will leave the market bringing economic profit back to zero

Demand for candles decreases which results in economic loss due to which firms exit in long run.

22) lowered its price below average variable cost in an effort to drive competitors out of the market then subsequently increased price.

23) in the short run firms will experience economic profit but in long run firms will enter the market bringing economic profit back down to zero.

Demand increases due to popularity which leads to increase in profit that attracts more firms in the market.

24) switching

Switching is the cost of changing the carrier.