Suppose a perfectly competitive constant-cost industry is in long-run equilibrium when market demand suddenly increases. What would probably happen to a firm in this industry in the long run?
a. It would experience no change for the original equilibrium
b. It would experience a higher equilibrium price
c. It would experience a lower equilibrium price
d. It would experience the same equilibrium price but would reduce its output
e. It would experience higher average total costs and would reduce its output
A
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“Demand” is a series of quantities demanded, one for each person in the market.
Answer the following statement true (T) or false (F)
What would the Herfindahl-Hirschman Index equal for an industry consisting of 20 firms with each holding a 5 percent market share?
A. 20 B. 100 C. 500 D. 2,500
In order for consumers to make cost-conscious decisions, all of the following conditions are essential. Which one is not?
a. They must have knowledge of the product they are considering—its quality and price. b. They must have money to spend. c. They must be able to eliminate the uncertainty of their decision and choose the best outcome. d. They must be able to capture the benefit of making a cost-conscious decision. e. They must have the ability to measure and compare the relative value of their options.
A good that is not scarce
A. is not in demand. B. would have a vertical supply curve over the relevant range. C. would have a zero price. D. would have an infinite price.