#10. The market for watches is perfectly competitive and is currently in equilibrium.What will happen if watches become more popular among college students?a. In the short run, firms will experience economic profits, but in the long run, firmswill leave the market, bringing economic profits back down to zero.b. In the short run, firms will experience economic profits, but in the long run, firmswill enter the market, bringing economic profits back down to zero.c. In the short run, firms will incur economic losses, but in the long run, firms willleave the market, bringing economic profits back down to zero.d. In the short run, firms will incur economic losses, but in the long run, firms willenter the market, bringing economic profits back down to zero.e. In both the short run and the long run, firms will experience zero economic profits.

Perfect competition is a market structure where there is a large number of buyers and sellers…

Answered: #10. The market for watches is…

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter11: Profit Maximization

Section: Chapter Questions

Problem 11.11P

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Quantity Total Cost 3 4 5 6 7 260 300 >> Show Transcribed Text 380 480 600 Average Marginal Total Cost Cost 86.67 20 75.00 76.00 80.00 85.71 Fall because firms will supply less goods Fall because firms will supply more goods Rise because firms will supply more goods Rise because firms will supply less goods 40 80 100 Suppose that in a competitive market the market price is $100. As this market makes the transition to its long-run equilibrium, prices will... 120 Use the following table for this question. Quantity Total Cost Average Total Cost Marginal Cost 3 260 86.67 20 4 300 75.00 40 5 380 76.00 80 6 480 80.00 100 7 600 85.71 120 Suppose that in a competitive market the market price is $100. As this market makes the transition to its long-run equilibrium, prices will...

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