Because industry X is characterised by perfect competition, every firm in the industry is earning zero economic profit. If the product price falls, no firm can survive. Do you agree or disagree? This is [correct, incorrect] . When price falls, the profits will be [positive, negative, zero] in SR, as a result, in LR, firms start [entering, existing] the industry, [increasing, reducing] supply until the price [eises, falls] to the point of [min of long run AC curve, max of long run AC curve, min of short run AC curve, max of short run AC curve, Min of long run MC curve, min of short run MC curve] . The remaining firms will keep earning [positive, negative, back to zero] profit

Because industry X is characterised by perfect competition, every firm in the industry is earning zero economic profit. If the product price falls, no firm can survive. Do you agree or disagree? This is [correct, incorrect] . When price falls, the profits will be [positive, negative, zero] in SR, as a result, in LR, firms start [entering, existing] the industry, [increasing, reducing] supply until the price [eises, falls] to the point of [min of long run AC curve, max of long run AC curve, min of short run AC curve, max of short run AC curve, Min of long run MC curve, min of short run MC curve] . The remaining firms will keep earning [positive, negative, back to zero] profit

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter22: Perfect Competition

Section: Chapter Questions

Problem 4QP

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Q52 If firms in a competitive industry are earning positive economic profits, in the long run we expect a. There would be no change in the industry as long as P = MC for the individual firms. b. The industry supply curve to shift to the right as new firms enter the industry, causing industry output to increase and price to fall. c. Individual firms will lower their price to discourage new firms from entering the industry. d. The demand curve for the product will shift to the left, so that the price of the product will fall. e. The government would intervene and force the firms to lower prices.
A perfectly competitive industry has a large number of potential entrants. Each firm has an identical cost structure such that long-run average cost is minimized at an output of 20 units (qi) =20. The minimum average cost is $10 per unit. Total market demand is given by ? = 1,500 − 50? Calculate the short-run supply function for each firm and the industry short-run supply function.
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Assume demand is D1 and the industry is in long-run equilibrium. How many firms are in the industry? When demand shifts from D1 to D2, the price changes ["less", "more"] in the short run than in the long run, and quantity changes ["more", "less"] in the short run than in the long run: Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
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Assume a competitive industry is initially at its long-run equilibrium, given the inverse market demand and supply functions: P = 25000 − 0.2Qd and P = 5000 + 0.3Qs If all current firms in this market have identical cost structures and produce 50 units at their break-even point: Now, assume that the inverse demand for this product increases to P = 35000 − 0.2Qd, which leads to an entry of and additional number of firms whose cost structures are also identical to those who existed in the market before the increase in the demand. If the new long-run equilibrium price after both changes is 20000 cents: a- How many new firms entered this market? b- What is the value of the elasticity of supply at long-run market equilibrium? c- Draw a fully-labeled graph that demonstrated the above changes at the firm and market levels, highlighting the long-run industry supply curve
Because industry X is characterized by perfect competition, every firm is earning zero economic profit. If the product price falls, no firm can survive. Do you agree or disagree.
Consider a perfectly competitive market, where the current number of firms is 50. Each firm has one unit of capital and can product q(1, L) = √L units of output with one unit of capital at a cost v per unit, and L units of labor at a cost w per unit in the short-run. a) Derive each firm's total cost function, c(q). B) Find a firm's short-run supply curve, qs(p), and the industry short-run supply curve, Qs(p).
Consider a perfectly competitive market, where the current number of firms is 50. Each firm has one unit of capital and can product q(1, L) = √L units of output with one unit of capital at a cost v per unit, and L units of labor at a cost w per unit in the short-run. a) Find a firm's short-run supply curve, qs(p), and the industry short-run supply curve, Qs(p). b) Given the market demand, = 10000 - 50p, and the industry short-run supply curve, find the short-run equilibrium price and quantity assuming that w = 1.
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Assume a competitive industry is initially at its long-run equilibrium, given the inverse market demand and supply functions: P = 25000 − 0.2Qd and P = 5000 + 0.3Qs If all current firms in this market have identical cost structures and produce 50 units at their break-even point: 1- How many firms operate in this market at this point? 2- What is the profit maximizing quantity produced by each competitive firm? Now, assume that the inverse demand for this product increases to P = 35000 − 0.2Qd, which leads to an entry of and additional number of firms whose cost structures are also identical to those who existed in the market before the increase in the demand. If the new long-run equilibrium price after both changes is 20000 cents: 3- How many new firms entered this market? 4- What is the value of the elasticity of supply at long-run market equilibrium? 5- Draw a fully-labeled graph that demonstrated the above changes at the firm and market levels, highlighting the long-run industry…
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