Question :
81.Inthe long run,
a.competitivefirms’profitsarezero.
b.competitivefirms’variablecostsarezero.
c.competitivefirms’ATCcurvesshiftupwardordownwardtoensuretha : 1261550
81.Inthe long run,
a.competitivefirms’profitsarezero.
b.competitivefirms’variablecostsarezero.
c.competitivefirms’ATCcurvesshiftupwardordownwardtoensurethatalldemandissatisfied.
d.thenumberoffirmsinthemarketisfixed.
82.RefertoFigure14-13.Ifthepriceis$6intheshortrun,whatwillhappeninthelongrun?
a.Nothing.Thepriceisconsistentwithzeroeconomicprofits,sothereisnoincentiveforfirmstoenterorexittheindustry.
b.Individualfirmswillearnpositiveeconomicprofitsintheshortrun,whichwillenticeotherfirmstoentertheindustry.
c.Individualfirmswillearnnegativeeconomicprofitsintheshortrun,whichwillcausesomefirmstoexittheindustry.
d.Becausethepriceisbelowthefirm’saveragevariablecosts,thefirmswillshutdown.
83.RefertoFigure14-13.Ifthepriceis$4.50intheshortrun,whatwillhappeninthelongrun?
a.Nothing.Thepriceisconsistentwithzeroeconomicprofits,sothereisnoincentiveforfirmstoenterorexittheindustry.
b.Individualfirmswillearnpositiveeconomicprofitsintheshortrun,whichwillenticeotherfirmstoentertheindustry.
c.Individualfirmswillearnnegativeeconomicprofitsintheshortrun,whichwillcausesomefirmstoexittheindustry.
d.Becausethepriceisbelowthefirm’saveragevariablecosts,thefirmswillshutdown.
84.RefertoFigure14-13.Ifthepriceis$3.50intheshortrun,whatwillhappeninthelongrun?
a.Nothing.Thepriceisconsistentwithzeroeconomicprofits,sothereisnoincentiveforfirmstoenterorexittheindustry.
b.Individualfirmswillearnpositiveeconomicprofitsintheshortrun,whichwillenticeotherfirmstoentertheindustry.
c.Individualfirmswillearnnegativeeconomicprofitsintheshortrun,whichwillcausesomefirmstoexittheindustry.
d.Becausethepriceisbelowthefirm’saveragevariablecosts,thefirmswillshutdown.
85.RefertoFigure14-13.Ifthepriceis$2intheshortrun,whatwillhappeninthelongrun?
a.Nothing.Thepriceisconsistentwithzeroeconomicprofits,sothereisnoincentiveforfirmstoenterorexittheindustry.
b.Individualfirmswillearnpositiveeconomicprofitsintheshortrun,whichwillenticeotherfirmstoentertheindustry.
c.Individualfirmswillearnnegativeeconomicprofitsintheshortrun,whichwillcausesomefirmstoexittheindustry.
d.Becausethepriceisbelowthefirm’saveragevariablecosts,thefirmswillshutdown.
86.Consideracompetitivemarketwithalargenumberofidenticalfirms.Thefirmsinthismarketdonotuseanyresourcesthatareavailableonlyinlimitedquantities.Inthismarket,anincreaseindemandwill
a.increasepriceintheshortrunbutnotinthelongrun.
b.increasepriceinthelongrunbutnotintheshortrun.
c.increasepricebothintheshortandthelongrun.
d.notaffectpriceineithertheshortorthelongrun.
87.Acompetitivemarketisinlong-runequilibrium.Ifdemanddecreases,wecanbecertainthatpricewill
a.fallintheshortrun.Allfirmswillshutdown,andsomeofthemwillexittheindustry.Pricewillthenrisetoreachthenewlong-runequilibrium.
b.fallintheshortrun.Nofirmswillshutdown,butsomeofthemwillexittheindustry.Pricewillthenrisetoreachthenewlong-runequilibrium.
c.fall inthe shortrun.All, some,orno firmswillshut down,andsome ofthemwill exittheindustry. Pricewillthenrisetoreachthenewlong-runequilibrium.
d.notfallintheshortrunbecausefirmswillexittomaintaintheprice.
88.Acompetitivemarketisinlong-runequilibrium.Ifdemandincreases,wecanbecertainthatpricewill
a.riseintheshortrun.Somefirmswillentertheindustry.Pricewillthenrisetoreachthenewlong-runequilibrium.
b.riseintheshortrun.Somefirmswillentertheindustry.Pricewillthenfalltoreachthenewlong-runequilibrium.
c.fall inthe shortrun.All, some,orno firmswillshut down,andsome ofthemwill exittheindustry. Pricewillthenrisetoreachthenewlong-runequilibrium.
d.notriseintheshortrunbecausefirmswillentertomaintaintheprice.
89.Inthetransitionfromtheshortruntothelongrun,thenumberoffirmsinacompetitiveindustryis
a.fixed.
b.increasingataconstantrate.
c.decreasing.
d.abletoadjusttomarketconditions.
90.Thelong-runsupplycurveforacompetitiveindustry
a.maybehorizontalifentryintotheindustrylowersaveragetotalcost.
b.maybeupward-slopingifhigher-costfirmsentertheindustry.
c.willbehorizontalifthereisfreeentryintotheindustry.
d.willbeupward-slopingiftherearebarrierstoentryintotheindustry.