If a firm is earning short-run economic profits shown in the above figure, in the long run
A) firms exit the industry, the market supply curve shifts rightward, and the market price falls.
B) firms enter the industry, the market supply curve shifts rightward, and the market price falls.
C) firms exit the industry, the market supply curve shifts leftward, and the market price falls.
D) firms enter the industry, the market supply curve shifts rightward, and the market price rises.
B
You might also like to view...
The slope of the budget line
A. always equals 1. B. equals income divided by price. C. equals the ratio of the prices. D. decreases as we move from left to right.
In the context of technology transfer, light green technologies refer to
a. innovations that directly impact the environment b. technologies that indirectly affect the environment c. toxic chemical use substitution d. none of the above
A year-long drought that destroys most wheat crops for the season would shift the:
A. short-run aggregate supply curve only. B. aggregate demand curve only. C. aggregate demand curve, and the short-run aggregate supply curve would shift in response. D. short-run aggregate supply curve and the long-run aggregate supply curve.
If an increase in quantity demanded of a product reduces the quantity demanded of another, then the two goods are said to be substitutes
a. True b. False Indicate whether the statement is true or false