You are a manager in a perfectly competitive market. The price in your market is $14. Your total cost curve is C(Q) = 10 + 4Q + 0.5Q2. What will happen in the long run if there is no change in the demand curve?
A. There will be neither entry nor exit from the market.
B. Some firms will enter the market eventually.
C. Some firms will leave the market eventually.
D. None of the answers is correct.
Answer: B
You might also like to view...
How will price, output, and profit compare if firms maximize sales rather than profit?
On a PPF with two products, health care and housing, what would occur in a stagnant economy if health care output increased?
A. Housing would increase. B. Deflation would occur. C. Housing would decrease. D. The stagnation would end.
How would the following events affect the market demand for laser printers?
a) A recession in the economy leading to a fall in income levels b) A five-fold increase in the price of printing paper
Refer to Figure 3-2. A decrease in the price of inputs would be represented by a movement from
A) A to B. B) B to A. C) S1 to S2. D) S2 to S1.