Please explain your answer!In a competitive constant cost industry with identical firms and free entry, long run producer surplus is:ZeroLower than ZeroGreater than ZeroAnswer can’t be determined In a competitive constant cost industry with identical firms and free entry, long run supply isAnswer can’t be determinedPerfectly inelasticPerfectly elasticDownward sloping Firms A and B produce and sell a good in the same perfectly competitive market. Firm A has a higher short run cost than Firm B and both are producing positive amounts. In this case:Firm A and B charge same priceFirm A charges higher price in equilibriumFirm B charges higher price in equilibrium

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Answered: In a competitive constant cost industry…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Please explain your answer!

In a competitive constant cost industry with identical firms and free entry, long run producer surplus is:
1. Zero
2. Lower than Zero
3. Greater than Zero
4. Answer can’t be determined

In a competitive constant cost industry with identical firms and free entry, long run supply is
1. Answer can’t be determined
2. Perfectly inelastic
3. Perfectly elastic
4. Downward sloping

Firms A and B produce and sell a good in the same perfectly competitive market. Firm A has a higher short run cost than Firm B and both are producing positive amounts. In this case:
1. Firm A and B charge same price
2. Firm A charges higher price in equilibrium
3. Firm B charges higher price in equilibrium

Definition Video Definition Point where the demand and supply curves intersect. At the equilibrium price the quantity supplied of a good is equal to the quantity demanded. When the market is not in equilibrium, market surplus or market shortage occurs. The region that is above the price equilibrium indicates market surplus and the region below the price equilibrium indicates market shortage. Video

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