In a perfectly competitive industry, assume there is a permanent increase in demand for a product. The process of transition to a new long-run equilibrium will include:

a. the exit of firms.
b. temporarily lower production costs.
c. both a and b.
d. neither a nor b.


d

Economics

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Answer the following statement true (T) or false (F)

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Low demand consumers are indifferent between second degree and first degree price discrimination.

Answer the following statement true (T) or false (F)

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In a system of flexible exchange rates, expansionary monetary policy abroad would induce

a. a rise in the U.S. exchange rate. b. a fall in the U.S. rate of exchange. c. a balance of payments surplus for the United States. d. no change in U.S. exchange rates.

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In reality international trade is determined solely by comparative advantage and the free market forces of supply and demand

a. True b. False Indicate whether the statement is true or false

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