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For a perfectly competitive industry, an increase in market demand will result in Exit of some firms Economic profits in the long run Long-run Industry supply that is horizontal Price at minimum AVC in the long run Entry into and exit from a perfectly competitive industry will Drive price to minimum Long-Run AVC Produce economic losses for entering firms Allow efficient managers to earn economic profits Drive price to minimum Long-Run ATC Positive Economic Profits are A long-run operating condition necessary for a monopolist Profits above what it takes to keep the entrepreneur in that business Equal to producer surplus Equal to the markup of price over Average Total Cost Monopolistic competition is a market structure very much like perfect competition except that The demand curves facing firms are perfectly price inelastic Each firm has a strategy for how they will react to other firms’ price or quantity Entry and exit is not permitted Firms differentiate the characteristics of their product

For a perfectly competitive industry, an increase in market demand will result in Exit of some firms Economic profits in the long run Long-run Industry supply that is horizontal Price at minimum AVC in the long run Entry into and exit from a perfectly competitive industry will Drive price to minimum Long-Run AVC Produce economic losses for entering firms Allow efficient managers to earn economic profits Drive price to minimum Long-Run ATC Positive Economic Profits are A long-run operating condition necessary for a monopolist Profits above what it takes to keep the entrepreneur in that business Equal to producer surplus Equal to the markup of price over Average Total Cost Monopolistic competition is a market structure very much like perfect competition except that The demand curves facing firms are perfectly price inelastic Each firm has a strategy for how they will react to other firms’ price or quantity Entry and exit is not permitted Firms differentiate the characteristics of their product

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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For a perfectly competitive industry, an increase in market demand will result in

  1. Exit of some firms
  2. Economic profits in the long run
  3. Long-run Industry supply that is horizontal
  4. Price at minimum AVC in the long run

Entry into and exit from a perfectly competitive industry will

  1. Drive price to minimum Long-Run AVC
  2. Produce economic losses for entering firms
  3. Allow efficient managers to earn economic profits
  4. Drive price to minimum Long-Run ATC

Positive Economic Profits are

  1. A long-run operating condition necessary for a monopolist
  2. Profits above what it takes to keep the entrepreneur in that business
  3. Equal to producer surplus
  4. Equal to the markup of price over Average Total Cost

Monopolistic competition is a market structure very much like perfect competition except that

  1. The demand curves facing firms are perfectly price inelastic
  2. Each firm has a strategy for how they will react to other firms’ price or quantity
  3. Entry and exit is not permitted
  4. Firms differentiate the characteristics of their product
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