Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506893
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Question
Chapter 9, Problem 5CQ
To determine
The effects of unanticipated increase of
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In a competitive market with free entry and exit from the market a permanent rise in demand will lead to
Select one or more:
a.
normal profits being made in the long-run
b.
excess profits being made in the short run (before new firms can enter)
c.
entry by new firms
d.
a permanent rise in prices
Multiple choice - microeconomics
43) What will entry into a market by new firms do?
A. It will increase the price of the good
B. It will increase profits of existing firms
C. It will increase the costs of existing firms
D. It will increase the supply of the good.
42) What is one consideration that applies to the analysis of a market over the long run but not to the analysis over the short run?
A. changes in firms’ cost structures
B. changes in the numbers of firms in the market
C. changes in the price of the product
D. changes in firms’ profits
The left graph shows the world market for wheat. The right graph shows the cost curves and the marginal revenue curve of an individual wheat farmer at the initial long-run equilibrium. The world population increases. In the left graph, draw the new demand curve. Label it. Draw the market supply curve that returns the wheat market to its long-run equilibrium. Label it. Draw a point to show the new long-run equilibrium price and quantity. In the right graph, draw a point to show the firm's price and quantity in the long run.
Note:-
Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.
Answer completely.
You will get up vote for sure.
Chapter 9 Solutions
Microeconomics: Private and Public Choice (MindTap Course List)
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- The firm's short-run supply curve shows the relationship between the price of a good and the: A. firms capacity output. B. quantity demanded of that good. C. willingness of consumers to purchase a good D. quantity supplied of that good.arrow_forwardwhat is the effect on the market price and output of hambyrgers with reference to the following? A. An increase in the income of consumers B. wide spread disease of beef C. Dramatic improvement in fast food technologyarrow_forwardA firm in a perfectly competitive market a. can increase its supply to lower the market price. b. can raise the price of its product and sell more output. C. can decrease its supply to increase the market price. d. has to accept the market price for its product. e. has to lower the price of its product to sell more output.arrow_forward
- Suppose a corn dog stand market is perfectly competitive and in long-run equilibrium. One day, the city starts imposing a $300 per year tax on each stand. How does this policy impact the number of corn dogs produced and sold in the market in the short run and long run? Down in the short run and no change in the long run No change in the short run and down in the long run Up in the short run and no change in the long run No change in the short run and up in the long runarrow_forwardPlease dear type the answer.arrow_forwardWhen price equals marginal cost,Select one:A.the industry is in long-run equilibrium.B.firms make positive profits.C.the marginal benefits of consuming an extra unit of the good exactly equals the marginal cost to society of producing the good.D.firms make zero profits.arrow_forward
- What adjustments should be anticipated in the long run and how would you calculate the new optimal quantity and price?arrow_forwardHealth Canada's report will cause consumers to demand 1. (less or more) tuna at every price. In the short run, firms will respond by 2. (exiting the industry, producing the same amount of tuna and running at a loss, producing more tuna and earning positive profit, entering the industry, producing the same amount of tuna and earning positive profit, producing less tuna and running at a loss) In the long run, some firms will respond by 3. ( entering the industry, producing less tuna and earning positive profit, producing more tuna and earning positive profit, exiting the industry, producing less tuna and running at a loss, producing more tuna and running at a loss) until 4. (consumer demand returns to its original level, tuna populations grow large enough to support more firms, new technologies are discovered that lower costs, each firm in the industry is once again earning zero profit) Assuming the long-run price and quantity are as you found in the preceding problem, the tuna…arrow_forwardIn a competitive market, are market supply curves typically more elastic in the short run or in the long run? Explain within 40 words.arrow_forward
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