Consider a constant cost industry that is perfectly competitive and in which the demand curve is downward sloping. Further, starting from a long-run equilibrium, firms experience an improvement in technology that lowers the marginal cost and average total cost to the same extent. In the long run, we expect: [Tick all that apply] the number of firms in the market to decrease. the number of firms in the market to increase. the profits earned by each firm to decrease. the profits earned by each firm to increase. None of the statements in this list apply.
Consider a constant cost industry that is perfectly competitive and in which the demand curve is downward sloping. Further, starting from a long-run equilibrium, firms experience an improvement in technology that lowers the marginal cost and average total cost to the same extent. In the long run, we expect: [Tick all that apply] the number of firms in the market to decrease. the number of firms in the market to increase. the profits earned by each firm to decrease. the profits earned by each firm to increase. None of the statements in this list apply.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![Consider a constant cost industry that is perfectly competitive and in which the demand curve is downward sloping. Further, starting from a long-run equilibrium, firms experience an improvement in technology that
lowers the marginal cost and average total cost to the same extent. In the long run, we expect: [Tick all that apply]
the number of firms in the market to decrease.
the number of firms in the market to increase.
the profits earned by each firm to decrease.
the profits earned by each firm to increase.
None of the statements in this list apply.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb4d9d51c-cee3-4855-8494-55e8cc009ab5%2F17c4e495-1aa9-402b-9108-a99d1ecfbbbe%2F4box0qn_processed.png&w=3840&q=75)
Transcribed Image Text:Consider a constant cost industry that is perfectly competitive and in which the demand curve is downward sloping. Further, starting from a long-run equilibrium, firms experience an improvement in technology that
lowers the marginal cost and average total cost to the same extent. In the long run, we expect: [Tick all that apply]
the number of firms in the market to decrease.
the number of firms in the market to increase.
the profits earned by each firm to decrease.
the profits earned by each firm to increase.
None of the statements in this list apply.
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