Answered: 6. A large number of new estate agents…

6. A large number of new estate agents (with the same technology as existing firms) enter the market. What is the effect on output, price, and profits in the short-run? How about the long-run?

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter5: Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 14PAE

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Question

Q6 Please help me solve this question so I can compare it to my awnser, question 6 Thank you

C: Disruptive technology
Estate agents help sellers advertise their home for sale to potential buyers. At present, estate agents
operate in a perfectly competitive market, at LR equilibrium.
6. A large number of new estate agents (with the same technology as existing firms) enter the
market. What is the effect on output, price, and profits in the short-run? How about the
long-run?
7. A well-known internet company (WKIC) quietly launches an internet service in which people
can find houses. The WKIC has considerably lower average costs than traditional estate
agents. What is the effect on output, price, and profits in the short-run? How about the
long-run? (Assume that the offering of the WKIC can be duplicated.)

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