Impact of trade in the perfect competition .

Question

If there were 10 firms in this market, the short-run equilibrium price of steel would be $___ per tonne. At that price, firms in this industry would [(A) earn a positive profit (B) earn a zero profit (C) operate at a loss (D)shut down]. Therefore, in the long run, firms would _____ the steel market. 2) Because you know that competitive firms earn ____ economic profit in the long run, you know the long-run equilibrium price must be $ ____ per tonne. From the graph, you can see that this means there will be ___ firms operating in the steel industry in long-run equilibrium. 3) True or False: Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns negative accounting profit. A) True B) False

Answer 1

Question

Chapter 14, Problem 11PA

Subpart (a):

To determine

Impact of trade in the perfect competition.

Subpart (b):

To determine

Impact of trade in the perfect competition.

Subpart (c):

To determine

Impact of trade in the perfect competition.

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