Assume the tennis ball industry, a perfectly competitive industry, is in long-run equilibrium with a market price of $5. If the demand for tennis balls increases and the industry experiences decreasing returns to scale, long-run equilibrium will be reestablished at a price
A. less than $5.
B. equal to $5.
C. greater than $5.
D. either greater than or less than $5, depending on the number of firms that enter the industry.
Answer: C
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Comdex Computer Company is producing at a price of $10 with an average total cost of $12and a fixed cost of $300 . The firm is currently producing 100 units
What are the operating profits of this firm? What are the economic profits of this firm?
If the positive effect of a greater quantity demanded more than offsets the negative effect of a lower price, then total revenue rises
Indicate whether the statement is true or false
Suppose an economist says that "other things equal, the lower the price of bananas, the greater the amount of bananas purchased." This statement indicates that:
A. the quantity of bananas purchased determines the price of bananas. B. all factors other than the price of bananas (for example, consumer tastes and incomes) are assumed to be constant. C. economists can conduct controlled laboratory experiments. D. one cannot generalize about the relationship between the price of bananas and the quantity purchased.
An industry in which there are five firms each accounting for 20 percent of the market has an HHI of 100.
Answer the following statement true (T) or false (F)