If a firm is earning short-run economic profits shown in the above figure, in the long run
A. firms enter the industry, the market supply curve shifts rightward, and the market price rises.
B. firms exit the industry, the market supply curve shifts leftward, and the market price falls.
C. firms enter the industry, the market supply curve shifts rightward, and the market price falls.
D. firms exit the industry, the market supply curve shifts rightward, and the market price falls.
Answer: C
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Suppose a monopolistic competitor produces 1,250 units of a good in equilibrium and charges a price of $7.50 for each unit. If the average total cost of producing 1,250 units of the good is $8, what is the total loss incurred by the producer?
A) $0.50 B) $500 C) $625 D) $1.50
Suppose MRS is not the same across all consumers. In this case, the economic outcome is not fully efficient because:
A) exchange is inefficient. B) the use of inputs in production is inefficient. C) the mix of outputs in inefficient. D) none of the above
Explain how both sales and long lines prior to store openings are characteristic of markets in disequilibrium
What is measured by the ratio of export prices to import prices?
a. The terms of trade b. The productivity ratio c. The trade standards d. The gains from trade e. The balance of trade