Consider a competitive market with a large number of identical firms. The firms in this market do not use any resources that are available only in limited quantities. In this market, an increase in demand will
a. increase price in the short run but not in the long run.
b. increase price in the long run but not in the short run.
c. increase price both in the short and the long run.
d. not affect price in either the short or the long run.
a
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Every year as the clock nears midnight on December 31st, the eyes of the world turn to Times Square in New York City to watch the famous ball drop at midnight
The event is open to everyone, but it is advised you arrive early to be able to participate because the square quickly becomes crowded with no space left for latecomers. This celebration is most like a A) common resource. B) public good. C) private good. D) natural monopoly.
Suppose the inverse supply curve in a market is Q = 6p2. If price decreases from 5 to 4, the change in producer surplus is
A) 150. B) -54. C) -6. D) -122.
In the spring of 1994, Northwest Airlines took the independent action of reducing fares on its flights. Other competing airlines quickly matched the fare cuts. These actions might be interpreted as:
A) a noncooperative game. B) a cooperative game. C) a constant sum game. D) a competitive game.