Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
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Chapter 12.5, Problem 1RQ
To determine
What happens to output, price, and economic profit in the short run and in long run when the demand increases?
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60. In a perfectly competitive market, which of the following will increase the economic profit the firms make in the short run?
A. an increase in labor costs
B. a decrease in market demand
C. an increase in market demand
D. an increase in the number of firms
Describe the course of events in a competitive market following apermanent increase in demand. What happens to output, price, andeconomic profit in the short run and in the long run?
Describe the course of events in a competitive market following theadoption of a new technology. What happens to output, price, andeconomic profit in the short run and in the long run?
Fill in the missing words:
1. If economic profits are being made in a perfectly competitive market, then firms will ________
the market. This will ________ the extra revenue firms earn for each unit of output sold
Chapter 12 Solutions
Macroeconomics
Ch. 12.1 - Prob. 1RQCh. 12.1 - Prob. 2RQCh. 12.1 - Prob. 3RQCh. 12.1 - Prob. 4RQCh. 12.2 - Prob. 1RQCh. 12.2 - Prob. 2RQCh. 12.2 - Prob. 3RQCh. 12.3 - Prob. 1RQCh. 12.3 - Prob. 2RQCh. 12.3 - Prob. 3RQ
Ch. 12.4 - Prob. 1RQCh. 12.4 - Prob. 2RQCh. 12.5 - Prob. 1RQCh. 12.5 - Prob. 2RQCh. 12.5 - Prob. 3RQCh. 12.6 - Prob. 1RQCh. 12.6 - Prob. 2RQCh. 12.6 - Prob. 3RQCh. 12.6 - Prob. 4RQCh. 12 - Prob. 1SPACh. 12 - Prob. 2SPACh. 12 - Prob. 3SPACh. 12 - Prob. 4SPACh. 12 - Prob. 5SPACh. 12 - Prob. 6SPACh. 12 - Prob. 7SPACh. 12 - Prob. 8SPACh. 12 - Prob. 9SPACh. 12 - Prob. 10APACh. 12 - Prob. 11APACh. 12 - Prob. 12APACh. 12 - Prob. 13APACh. 12 - Prob. 14APACh. 12 - Prob. 15APACh. 12 - Prob. 16APACh. 12 - Prob. 17APACh. 12 - Prob. 18APACh. 12 - Prob. 19APACh. 12 - Prob. 20APACh. 12 - Prob. 21APACh. 12 - Prob. 22APACh. 12 - Prob. 23APA
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- explain why is the long run market supply curve horizontal in long run in perfect competitive market? How does a competitive firm determine the quantity that maximizes profit? When might a competitive firm shutdown in the short run and exit the market in the long run?arrow_forward(10) In long-run equilibrium in a perfectly competitive market, which of the following is true? (a) Average cost equals marginal cost (b)Profit = 0 (C)Price equals marginal cost (d)all of the abovearrow_forwardAssume that the market for pasta is in long-run equilibrium and that the pasta industry is a constant-cost industry. Explain with a graph and words what will happen to the price and quantity in the market when the demand for pasta decreases.arrow_forward
- Economics PRICE ошо K Figure 16-8 B J H M L QUANTITY MC ATC Demand MR Refer to Figure 16-8. Which of the following best describes the profit-maximizing outcome for the firm depicted here? a. This firm is incurring a short-run loss, but will earn zero profit in the long run. b. This firm is in long run equilibrium and will continue to earn zero profit. c. This firm is earning a short-run profit, but will earn zero profit in the long run. d. This firm is earning zero profit in the short run, but will earn a positive profit in the long run.arrow_forward1)Which kind of industry would have a downward-sloping long-run supply curve? Select one: a. no industry b. a decreasing cost industry c. a constant cost industry d. an increasing cost industry 2)The market for designer jeans is a good example of a perfectly competitive market. Select one: True False 6)The long run is the period after all exit and entry has occurred. Select one: True Falsearrow_forwardUkraine is one of the biggest exporters of sunflower oil in the world. War between Ukraine and Russia hence significantly impacted the available stock of the sunflower oil in the world’s market. Either sunflower oil or olive oil is an input to manufacture biscuit. Consider that the market for olive oil is in perfect competition and initially at the equilibrium. Explain the impact of the war on the supply, demand, equilibrium on market of olive oil Give a graphical representationarrow_forward
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