The graph below shows a perfectly competitive firm in short run equilibrium, where the firm has chosen the output level which maximizes profit. Think about what will happen in the market over time. In the long run Question 35 options: a) price will decrease until economic profit is zero. b) demand will increase causing economic profits to increase. c) price will increase until economic profit is positive. d) price will increase causing economic profits to increase.
The graph below shows a perfectly competitive firm in short run equilibrium, where the firm has chosen the output level which maximizes profit. Think about what will happen in the market over time. In the long run Question 35 options: a) price will decrease until economic profit is zero. b) demand will increase causing economic profits to increase. c) price will increase until economic profit is positive. d) price will increase causing economic profits to increase.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The graph below shows a perfectly competitive firm in short run equilibrium, where the firm has chosen the output level which maximizes profit. Think about what will happen in the market over time. In the long run
Question 35 options:
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Transcribed Image Text:Price (P)
36
MC1
32
28
24
20
ATC
D
16
12
AVC1
8
6 12 18 24 30 36 42 48 54
Quantity (Q)
4-
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