3. Entry and exit in the long run Suppose that bike manufacturers in a competitive price-searcher market earn negative profits in the short run. In this scenario, there manufacturers in the industry than there would be in long-run equilibrium. Now consider the long run in which bike manufacturers are free to enter and exit the market. The following graph shows the demand curve in the market for bikes. Considering the situation just described, shift the demand curve on the graph to show how the demand curve facing an individual firm in the industry would change in the long run. Firm's Demand Curve Firm's Demand Curve QUANTITY (Bikes) PRICE (Dollars per bike)

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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: Amy v
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Homework
3. Entry and exit in the long run
Suppose that bike manufacturers in a competitive price-searcher market earn negative profits in the short run.
In this scenario, there
v manufacturers in the industry than there would be in long-run equilibrium.
A-Z
Now consider the long run in which bike manufacturers are free to enter and exit the market. The following graph shows the demand curve in the
market for bikes.
Considering the situation just described, shift the demand curve on the graph to show how the demand curve facing an individual firm in the industry
would change in the long run.
?
O
Firm's Demand Curve
A
Firm's Demand Curve
QUANTITY (Bikes)
PRICE (Dollars per bike)
Transcribed Image Text:: Amy v « * CENGAGE MINDTAP Q Search this course Homework 3. Entry and exit in the long run Suppose that bike manufacturers in a competitive price-searcher market earn negative profits in the short run. In this scenario, there v manufacturers in the industry than there would be in long-run equilibrium. A-Z Now consider the long run in which bike manufacturers are free to enter and exit the market. The following graph shows the demand curve in the market for bikes. Considering the situation just described, shift the demand curve on the graph to show how the demand curve facing an individual firm in the industry would change in the long run. ? O Firm's Demand Curve A Firm's Demand Curve QUANTITY (Bikes) PRICE (Dollars per bike)
Firm's Demand Curve
Firm's Demand Curve
QUANTITY (Bikes)
Which of the following statements are true about a competitive price-searcher market? Check all that apply.
O Firms earn negative profit in the long run.
O Price equals average total cost in the long run.
O Firms are not price takers.
O Firms face low harriers to entry
PRICE (Dollars per bike)
Transcribed Image Text:Firm's Demand Curve Firm's Demand Curve QUANTITY (Bikes) Which of the following statements are true about a competitive price-searcher market? Check all that apply. O Firms earn negative profit in the long run. O Price equals average total cost in the long run. O Firms are not price takers. O Firms face low harriers to entry PRICE (Dollars per bike)
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