Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
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Question
Chapter 12.5, Problem 3RQ
To determine
What happens to output, price, and economic profit in the short run and in long run when the new technology that reduces production cost is adopted?
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Students have asked these similar questions
Question 14
Ma owns a pizza shop with AVC = $70 and ATC = $98. It is a competitive market and the market price for pizza is $95. Mr. Ma should
A: exit the market in both the short-run and long-run.
B: continue his business in both the short-run and long-run.
C: continue his business in the short-run but exit in the long-run if the situation continues.
D: shut down his business in the short-run but continue in the long-run if the situation continues.
1)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
False
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
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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Similar questions
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- Malaysia is the world's largest producer of rubber gloves. The Rubber gloves industry is perceived as a highly competitive industry. Explain in detail how rubber glove manufacturers are able to increase their production in the short-run and long run.arrow_forward12. A dairy farmer is operating in a perfectly competitive market. The market price for milk is between the farmer's average variable cost and average total cost at the profit-maximizing level of output. What will the farmer do? Produce more milk Produce less milk Shut down in the short run Operate in the short run and leave the industry in the long run Insufficient information to determinearrow_forwardDescribe 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?arrow_forward
- The short-run market demand and supply for Kente cloth are expressed as follows: Demand: ? = 40 − 0.25? Supply: ? = 5 + 0.05? Marginal cost: −20 +4? a) The short-run level of output is ___________ metres.[1] 40.00[2] 5.05[3] 35.30[4] 20.00[5] 7.71arrow_forwardShow the competitive firm in long run equilibrium and describe productive and allocative efficiency. Demonstrate what happens to equilibrium price and quantity with an increase in market demand. Can the firm make economic profit in the short run? What about the long run?arrow_forward1.Explain how the long run differs from the short run in pure competition. 2. Explain how the entry and exit of firms affects resource flows and long-run profits and lossesarrow_forward
- 7 A local tavern in a perfectly competitive market was in a long-run equilibrium. Then, a scientific breakthrough determines that beer prevents heart attacks, resulting in an increase in demand for beer. Describe the market processes that affect the tavern in both the short run and the new long-run equilibrium.arrow_forwardassume fresh vegetable market is perfectly competitive and a typical farmer was break-even prior to the price changes. explain and illustrate graphically, the effect of change in price on the short-run position of an individual farm whose crops have not been affected by the flood. explain and illustrate the long run position for a typical farmer.arrow_forwardFill 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 soldarrow_forward
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