.Suppose a demand for good produced by a certain industry changes then answer the following questions: 1- What will be the affect of change in demand on the output of the firm and industry in short run? 2- What will be the affect of change in demand on the output of the firm and industry in long run? 3-For what reason the affect of change in demand on firm's and industry's output differ in short and long run?

.Suppose a demand for good produced by a certain industry changes then answer the following questions: 1- What will be the affect of change in demand on the output of the firm and industry in short run? 2- What will be the affect of change in demand on the output of the firm and industry in long run? 3-For what reason the affect of change in demand on firm's and industry's output differ in short and long run?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 9SCQ: Productive efficiency and allocative efficiency are two concepts achieved in the long mm in a...

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It is clear that businesses operate in the short run, but do they ever operate in the long run? Discuss.
Productive efficiency and allocative efficiency are two concepts achieved in the long mm in a perfectly competitive market. These are the two reasons why we call them perfect. How would you use these two concepts to analyze other market structures and label them imperfect?
26.A firm operates in a perfectly competitive market and is producing at the profit-maximizing output. It is incurring economic losses. Based on this information, which of the following is true? A-Average total cost = price; marginal cost > marginal revenue. B-Average total cost = price; marginal cost = marginal revenue C-Average total cost > price; marginal cost = marginal revenue D-Average total cost > price; marginal cost > marginal revenue E-Average total cost < price; marginal cost > marginal revenue 27.In the short run, a price-taking firm decides to produce zero units of output. Which of the following must have been the case? A-The market price was less than the firm's average variable cost. B-The firm was earning normal profits in the short run but projected economic losses in the long run. C-The firm's average total cost was higher than its average revenue. D-The market price was between the firm's average variable cost and average total cost. E-The…
We expect that firms in perfectly competitive markets can earn higher economic profits in the short run but will only earn normal profit in the long run. 1. Business owners would prefer to earn higher economy profits. Why do economists consider it inefficient when firms earn above normal profit? 2. Why do economists consider it inefficient when firms earn less than normal profit?
1) Referring to Figure, at price $80, what is the profit-maximizing output in the short run? 2) Refer to Figure. As the competitive industry, not just the firm in question, moves toward long-run equilibrium, the firm will be forced to operate at what level of output?
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Graph represents the cost structure of an individual firm in a perfectly competitive market. If the price decreases to $25, Considering the short-run: would firm earn positive or negative profit in this new scenario? Would it continue operating or stop production? Considering the long-run: would new firms enter to the market or would existing firms exit from it? What would happen to the market equilibrium?
23. Suppose the market for gourmet chocolate is in long-run equilibrium, and an economic downturn has reduced consumer discretionary incomes. Assume chocolate is a normal good, and the chocolate producers have identical cost structures. What will happen to demand—shift right, shift left, no shift? What will happen to profits for chocolate producers in the short run—increase, decrease, or no change? What will happen to the short-run supply curve—increase, decrease, or no change? What will happen to the long-run supply curve—increase, decrease, or no change?
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1. The market for manicures and other nail treatments is very competitive. How would the following developments affect the number of nail treatments that a typical nail salon wants to supply in the short run? a. Heightened concern about their appearance causes people to want more manicures at a given price. b. The government requires all nail salons to pay a new yearly licensing fee to operate. c. Worse job prospects elsewhere in the economy cause more people to want to become manicurists, causing the wages of manicurists to fall.
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