A perfectly competitive firm in a constant-cost industry produces 3,000 units of a good at a total cost of $36,000. The prevailing market price is $15. What will happen to the number of firms in the industry and to the industry's output in the long run? The number of firms remains constant and the industry’s output increases. The number of firms increases and the industry's output increases. The number of firms remains constant and the industry's output decreases. The number of firms decreases and the industry’s output decreases. а. b. с. d.
A perfectly competitive firm in a constant-cost industry produces 3,000 units of a good at a total cost of $36,000. The prevailing market price is $15. What will happen to the number of firms in the industry and to the industry's output in the long run? The number of firms remains constant and the industry’s output increases. The number of firms increases and the industry's output increases. The number of firms remains constant and the industry's output decreases. The number of firms decreases and the industry’s output decreases. а. b. с. d.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:A perfectly competitive firm in a constant-cost industry produces 3,000 units of a good at
a total cost of $36,000. The prevailing market price is $15. What will happen to the
number of firms in the industry and to the industry's output in the long run?
The number of firms remains constant and the industry's output increases.
The number of firms increases and the industry's output increases.
The number of firms remains constant and the industry's output decreases.
The number of firms decreases and the industry's output decreases.
2.
а.
b.
c.
d.
It would make no sense for an individual seller in perfect competition to sell at a price
lower than the market price because
3.
the seller can sell any quantity she wants at the prevailing market price
quantity demanded of the product would exceed the quantity supplied
the sellers would start a price war.
demand is perfectly inelastic.
а.
b.
с.
d.
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