What has changed in the industry when moving from the short run to the long run? Explain why.
Homework Answers
In the short run firms are earning positive economic profit which encourages new firms to enter the market. This divides the existing demand into larger number of firms. As a result demand for each firm falls such that price charged is equal to average cost and all existing firms earn zero economic profit.
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What has changed in the industry when moving from the short run to the long run? Explain why.
What has changed in the industry when moving from the short run to the long run? Explain why. uestion 3: Monopolis...
What has changed in the industry when moving from the short run to
the long run? Explain why.
uestion 3: Monopolistic Competition (20 Points) Costs & Revenue The SHORT RUN МC ATC econ proft profi AR DC MR Output Copyright: www.economicsonlineco.uk the short run graph of the monopolistic competition firm in the sh ining thic product? Padngh We were unable to transcribe this image
Explain why the industry supply curve is not the long-run industry marginal cost curve. The industry...
Explain why the industry supply curve is not the long-run industry marginal cost curve. The industry supply curve is not the long-run industry marginal cost curve because O A. production will only occur along the long-run marginal cost curve for prices above average variable cost. O B. at prices above the minimum long-run average cost of production, firms will exit the industry. O C. production will only occur along the long-run marginal cost curve when profits are earned. O D....
5. Moving from short-run to long-run equilibrium Suppose the competitive market for cat toys is in...
5. Moving from short-run to long-run equilibrium Suppose the competitive market for cat toys is in short-run equilibrium. The following graph on the left shows the demand and short-run supply for cat toys. Assume every firm in this industry is identical. The graph on the right shows the marginal cost (MC) and average cost (AC) curves for each firm in the long run. ? ? Short-Run Market Individual Firm 10 10 8 8 AC MC Supply 2 1 1 Demand...
please complete the LR line 3. Moving from short-run to long-run equilibrium Suppose the competitive market...
please complete the LR line
3. Moving from short-run to long-run equilibrium Suppose the competitive market for cat toys is in short-run equilibrium. The following graph on the left shows the demand and short-run supply for cat toys. Assume every firm in this industry is identical. The graph on the right shows the marginal cost (MC) and average cost (AC) curves for each firm in the long run. Short-Run Market Individual Firm Supply PRICE (Dollars per cat toy) AAAAAAAA+ COST...
4. Explain what happens in the long run when firms in an industry are earning positive...
4. Explain what happens in the long run when firms in an industry are earning positive profit, and why economists assume normal profit in competitive industries is 0. 5. Explain price discrimination and how it can increase efficiency.
. Define and explain the difference between the long run and the short-run production functions. Why...
. Define and explain the difference between the long run and the short-run production functions. Why are short-run costs higher than costs in the long run? Why are the short-run average and marginal cost curves U shaped? What generates a U shape for the long-run average and marginal cost curves?
Using a diagram, explain why monopolies make abnormal profits both in the long run and short run
Using a diagram, explain why monopolies make abnormal profits both in the long run and short run
6. Short-run and long-run effects of a shift in demand Suppose that the tuna industry is...
6. Short-run and long-run effects of a shift in demandSuppose that the tuna industry is in long-run equilibrium at a price of $ 5 per can of tuna and a quantity of 500 million cans per year. Suppose that WebMD claims that the bacteria found in tuna will decrease your expected lifespan by 2 years.WebMD's claim will cause consumers to demand _______ tuna at every price. In the short run, firms will respond by _______ Shift the demand curve, the supply...
7. Short-run and long-run effects of a shift in demand Suppose that the shrimp industry is...
7. Short-run and long-run effects of a shift in demand Suppose that the shrimp industry is in long-run equilibrium at a price of $5 per pound of shrimp and a quantity of 400 million pounds per year. Suppose that WebMD claims that a protein found in shrimp will increase your expected lifespan by 2 years. WebMD's claim will cause consumers to demand _______ shrimp at every price. In the short run, firms will respond by _______ .Shift the demand curve, the supply...
8. Short-run and long-run effects of a shift in demand Suppose that the chicken industry is...
8. Short-run and long-run effects of a shift in demandSuppose that the chicken industry is in long-run equilibrium at a price of $ 5 per pound of chicken and a quantity of 50 million pounds per year. Suppose that WebMD claims that the bacteria found in chicken will decrease your expected lifespan by 3 years.WebMD's claim will cause consumers to demand _______ chicken at every price. In the short run, firms will respond by _______.Shift the demand curve, the supply...
What has changed in the industry when moving from the short run to
the long run? Explain why.
uestion 3: Monopolistic Competition (20 Points) Costs & Revenue The SHORT RUN МC ATC econ proft profi AR DC MR Output Copyright: www.economicsonlineco.uk the short run graph of the monopolistic competition firm in the sh ining thic product? Padngh We were unable to transcribe this image
Explain why the industry supply curve is not the long-run industry marginal cost curve. The industry supply curve is not the long-run industry marginal cost curve because O A. production will only occur along the long-run marginal cost curve for prices above average variable cost. O B. at prices above the minimum long-run average cost of production, firms will exit the industry. O C. production will only occur along the long-run marginal cost curve when profits are earned. O D....
5. Moving from short-run to long-run equilibrium Suppose the competitive market for cat toys is in short-run equilibrium. The following graph on the left shows the demand and short-run supply for cat toys. Assume every firm in this industry is identical. The graph on the right shows the marginal cost (MC) and average cost (AC) curves for each firm in the long run. ? ? Short-Run Market Individual Firm 10 10 8 8 AC MC Supply 2 1 1 Demand...
please complete the LR line
3. Moving from short-run to long-run equilibrium Suppose the competitive market for cat toys is in short-run equilibrium. The following graph on the left shows the demand and short-run supply for cat toys. Assume every firm in this industry is identical. The graph on the right shows the marginal cost (MC) and average cost (AC) curves for each firm in the long run. Short-Run Market Individual Firm Supply PRICE (Dollars per cat toy) AAAAAAAA+ COST...
4. Explain what happens in the long run when firms in an industry are earning positive profit, and why economists assume normal profit in competitive industries is 0. 5. Explain price discrimination and how it can increase efficiency.
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