Consider the perfectly competitive market for steel, which is in long-run equilibrium. Now the demand for cars, for which steel is an essential input, decreases. As a result, we would expect that in the market for steel Profits will increase in the long-runFirms will enter the market in the short-runThe quantity produced by the individual firm will increase in the short-run.Profits will decrease in the short-run

Perfectly competitive market- It is a market where there are large numbers of buyers and sellers and…

Answered: Consider the perfectly competitive…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 1SCQ: Firms ill a perfectly competitive market are said to be price takers that is, once the market...

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Consider the perfectly competitive market for steel, which is in long-run equilibrium. Now the demand for cars, for which steel is an essential input, decreases. As a result, we would expect that in the market for steel

Profits will increase in the long-run
Firms will enter the market in the short-run
The quantity produced by the individual firm will increase in the short-run.
Profits will decrease in the short-run

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