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17. John makes ice cream which he sells to restaurants and supermarkets. He has one ice cream maker, which is all the capital he owns and has one person working for him. When an extreme heat wave hits, the demand for ice cream increases substantially and John has to supply more ice cream. Initially, John does not have the means to buy another ice cream maker rather employs two more people. What will be considered the "long run" for John in his ice cream making business? a) When he starts making a profit b) When the heat wave is over c) When he has employed the two extra people d) When he can buy another ice cream maker 18. In a perfect competitive market, there are-- --so that no single firm can influence the market price, meaning firms in a perfectly competitive markets are- On the other hand, a monopolist is a --- , and his supply is equal to the market supply. a) Many firms, price takers, price maker b) A couple of firms, price makers, price setter c) Many firms, price settlers, price makers d) A couple of firms, price takers, price taker 19. The figure shows the short run conditions of a firm in a perfectly competitive market. In the long run, - -wil ---the industry so that the market supply curve shifts to the -ntil prices --sufficiently to allow all firms to make a normal profit only. MC AC R13 R10 AR MR E Quantity 1200 a) Existing firms, exit, right, drop b) New firms, enter, right, drop c) Existing firms, exit, left, rise d) New firms, enter, left, rise Unit revenue and cost

17. John makes ice cream which he sells to restaurants and supermarkets. He has one ice cream maker, which is all the capital he owns and has one person working for him. When an extreme heat wave hits, the demand for ice cream increases substantially and John has to supply more ice cream. Initially, John does not have the means to buy another ice cream maker rather employs two more people. What will be considered the "long run" for John in his ice cream making business? a) When he starts making a profit b) When the heat wave is over c) When he has employed the two extra people d) When he can buy another ice cream maker 18. In a perfect competitive market, there are-- --so that no single firm can influence the market price, meaning firms in a perfectly competitive markets are- On the other hand, a monopolist is a --- , and his supply is equal to the market supply. a) Many firms, price takers, price maker b) A couple of firms, price makers, price setter c) Many firms, price settlers, price makers d) A couple of firms, price takers, price taker 19. The figure shows the short run conditions of a firm in a perfectly competitive market. In the long run, - -wil ---the industry so that the market supply curve shifts to the -ntil prices --sufficiently to allow all firms to make a normal profit only. MC AC R13 R10 AR MR E Quantity 1200 a) Existing firms, exit, right, drop b) New firms, enter, right, drop c) Existing firms, exit, left, rise d) New firms, enter, left, rise Unit revenue and cost

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter7: Production, Costs, And Industry Structure
Section: Chapter Questions
Problem 35CTQ: It is clear that businesses operate in the short run, but do they ever operate in the long run?...
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17. John makes ice cream which he sells to restaurants and supermarkets. He has one ice cream maker, which is all the capital he owns and has one person working for him. When an extreme heat wave hits, the demand for ice cream increases substantially and John has to supply more ice cream. Initially, John does not have the means to buy another ice cream maker rather employs two more people. What will be considered the "long run" for John in his ice cream making business? a) When he starts making a profit b) When the heat wave is over c) When he has employed the two extra people d) When he can buy another ice cream maker 18. In a perfect competitive market, there are----so that no single firm can influence the market price, meaning firms in a perfectly competitive markets are------. On the other hand, a monopolist is a ------------, and his supply is equal to the market supply. a) Many firms, price takers, price maker b) A couple of firms, price makers, price setter c) Many firms, price settlers, price makers d) A couple of firms, price takers, price taker 19. The figure shows the short run conditions of a firm in a perfectly competitive market. In the long run, --------will --------the industry so that the market supply curve shifts to the ---------until prices------sufficiently to allow all firms to make a normal profit only. MC R13 R10 AR= MR Quantity 1200 a) Existing firms, exit, right, drop b) New firms, enter, right, drop c) Existing firms, exit, left, rise d) New firms, enter, left, rise Unit revenue and cost
Transcribed Image Text:17. John makes ice cream which he sells to restaurants and supermarkets. He has one ice cream maker, which is all the capital he owns and has one person working for him. When an extreme heat wave hits, the demand for ice cream increases substantially and John has to supply more ice cream. Initially, John does not have the means to buy another ice cream maker rather employs two more people. What will be considered the "long run" for John in his ice cream making business? a) When he starts making a profit b) When the heat wave is over c) When he has employed the two extra people d) When he can buy another ice cream maker 18. In a perfect competitive market, there are----so that no single firm can influence the market price, meaning firms in a perfectly competitive markets are------. On the other hand, a monopolist is a ------------, and his supply is equal to the market supply. a) Many firms, price takers, price maker b) A couple of firms, price makers, price setter c) Many firms, price settlers, price makers d) A couple of firms, price takers, price taker 19. The figure shows the short run conditions of a firm in a perfectly competitive market. In the long run, --------will --------the industry so that the market supply curve shifts to the ---------until prices------sufficiently to allow all firms to make a normal profit only. MC R13 R10 AR= MR Quantity 1200 a) Existing firms, exit, right, drop b) New firms, enter, right, drop c) Existing firms, exit, left, rise d) New firms, enter, left, rise Unit revenue and cost
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