Homework Answers
Correct answer is option d ie. The firm in question may suffer losses and exit the industry.
As the firm is operating in perfectively competitive, firm which is experiencing increased cost will incur loss in long run and will eventually have to exit the industry
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Suppose one firm in a perfectly competitive industry experiences an increase in its costs of production. Which of the f...
37. If every firm in a perfectly competitive industry experiences the same technological improvement, then A....
37. If every firm in a perfectly competitive industry experiences the same technological improvement, then A. the firm's short-run supply curves will shift to the right. B. the industry's short-run supply curve will shift to the right. C. the industry's long-run supply curve will shift downward or to the right D. All of the above statements are true. E. Only A and B are true. D, a, ap, o, 38. In a perfectly competitive, constant-cost industry, the long-run equilibrium price...
QUESTION 9 The perfectly competitive firm faces a downward sloping demand curve. constant marginal costs. a...
QUESTION 9 The perfectly competitive firm faces a downward sloping demand curve. constant marginal costs. a horizontal supply function. perfectly elastic demand. QUESTION 10 The short-run industry supply curve slopes up because the law of diminishing marginal product applies in the short run. wages increase as the industry increases output. the firms eventually experience diseconomies of scale. the higher price is needed to get more firms to enter the industry.
The demand curve for a perfectly competitive firm options: is upward sloping. is perfectly horizontal. is...
The demand curve for a perfectly competitive firm options: is upward sloping. is perfectly horizontal. is perfectly vertical. maybe downward or upward sloping, depending upon the type of product offered for sale. In the short run, the best policy for a perfectly competitive firm is to Question 17 options: shut down its operation if the price ever falls below average total cost. produce and sell its product as long as price is greater than average variable cost. shut down its...
QUESTION 6 Industry is a perfectly competitive industry. Assume that as a result of changes in...
QUESTION 6 Industry is a perfectly competitive industry. Assume that as a result of changes in other markets there is a twenty percent increase in the price of variable inputs used by firms in industry Y. After all adjustments have taken place, we would expect the equilibrium price in industry Yto: increase and the number of firms to increase. decrease and the number of firms to increase. increase and the number of firms to decrease. decrease and the number of...
If the donut industry is perfectly competitive and is in long-run equilibrium, then the price of...
If the donut industry is perfectly competitive and is in long-run equilibrium, then the price of a donut Question 20 options: A) equals long-run average cost. B) is greater than marginal cost. C) is greater than long-run average cost. D) is greater than short-run average cost. The industry that produces zangs is in long-run equilibrium. Then the demand for zangs increases permanently. As a result, firms in the industry will ________. Some firms will ________ the industry, and the industry...
20. Which of the following statements is not a characteristic of a perfectly competitive firm? a....
20. Which of the following statements is not a characteristic of a perfectly competitive firm? a. Perfectly competitive firms view each other as fierce rivals. b. Firms are price-takers. c. All firms produce a homogeneous product. d. Perfectly competitive markets allow freedom of entry and exit. 21. Since the firm’s demand curve is perfectly elastic for a price-taking firm, a. P = MR. b. P = MRP. c. P = TR. d. both a and b. e. both a and...
Concept Question 3.25 In a perfectly competitive industry in the short run, if wages increase, which...
Concept Question 3.25 In a perfectly competitive industry in the short run, if wages increase, which of the following will occu O A. Marginal costs will increase, and industry supply will increase OB. Marginal costs will not change, but the industry supply will increase. O C. Marginal costs will decrease, and industry supply will decrease. O D. Marginal costs will increase, and industry supply will decrease. In a competitive market, positive economic profits act to O A. signal resource owners...
Explain why each of the following examples is not a perfectly competitive industry. One firm produces...
Explain why each of the following examples is not a perfectly competitive industry. One firm produces a large portion of the industry’s total output, but there are many firms in the industry, and their products are indistinguishable. Firms can easily exit and enter the industry. There are many buyers and sellers in the industry. Consumers have equal information about the prices of firms’ products, which differ moderately in quality from firm to firm. Many taxicabs compete in a city. The...
Explain why each of the following examples is not a perfectly competitive industry. One firm produces...
Explain why each of the following examples is not a perfectly competitive industry. One firm produces a large portion of the industry’s total output, but there are many firms in the industry, and their products are indistinguishable. Firms can easily exit and enter the industry. There are many buyers and sellers in the industry. Consumers have equal information about the prices of firms’ products, which differ moderately in quality from firm to firm. Many taxicabs compete in a city. The...
Suppose an economy produces cell phones and GPS devices in perfectly competitive industries. The economy is...
Suppose an economy produces cell phones and GPS devices in perfectly competitive industries. The economy is currently operating at a point on its production possibility frontier. The economy will most likely move to a less-desirable point on the production possibility frontier if more firms enter the GPS device industry. O a single firm gains control over the production of cell phones. more firms enter the cell phone industry. more firms enter both the GPS device industry and the cell phone...
37. If every firm in a perfectly competitive industry experiences the same technological improvement, then A. the firm's short-run supply curves will shift to the right. B. the industry's short-run supply curve will shift to the right. C. the industry's long-run supply curve will shift downward or to the right D. All of the above statements are true. E. Only A and B are true. D, a, ap, o, 38. In a perfectly competitive, constant-cost industry, the long-run equilibrium price...
QUESTION 9 The perfectly competitive firm faces a downward sloping demand curve. constant marginal costs. a horizontal supply function. perfectly elastic demand. QUESTION 10 The short-run industry supply curve slopes up because the law of diminishing marginal product applies in the short run. wages increase as the industry increases output. the firms eventually experience diseconomies of scale. the higher price is needed to get more firms to enter the industry.
QUESTION 6 Industry is a perfectly competitive industry. Assume that as a result of changes in other markets there is a twenty percent increase in the price of variable inputs used by firms in industry Y. After all adjustments have taken place, we would expect the equilibrium price in industry Yto: increase and the number of firms to increase. decrease and the number of firms to increase. increase and the number of firms to decrease. decrease and the number of...
Concept Question 3.25 In a perfectly competitive industry in the short run, if wages increase, which of the following will occu O A. Marginal costs will increase, and industry supply will increase OB. Marginal costs will not change, but the industry supply will increase. O C. Marginal costs will decrease, and industry supply will decrease. O D. Marginal costs will increase, and industry supply will decrease. In a competitive market, positive economic profits act to O A. signal resource owners...
Suppose an economy produces cell phones and GPS devices in perfectly competitive industries. The economy is currently operating at a point on its production possibility frontier. The economy will most likely move to a less-desirable point on the production possibility frontier if more firms enter the GPS device industry. O a single firm gains control over the production of cell phones. more firms enter the cell phone industry. more firms enter both the GPS device industry and the cell phone...
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