Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Question
Chapter 8, Problem 20SQ
To determine
The transition of the industry toward a new equilibrium due to a permanent increase in
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Students have asked these similar questions
Would a firm earning zero economic profit continue to produce, even in the long run?
In long-run competitive equilibrium, a firm earning zero economic profit
A. will not continue to produce because this return is not covering its opportunity costs.
B. will not continue to produce because it would be better off shutting down.
C. will not continue to produce because such profit corresponds with negative accounting profit.
D. will continue to produce because such profit is as high a return as could be earned elsewhere.
E. will not continue to produce because it could earn a better return in another industry.
A perfectly competitive industry consists of many identical firms, each with a long-run total cost function of TC = 500Q-20Q^2+0.5Q^3.
a. In long-run equilibrium, how much will each firm produce? b. What is the long-run equilibrium price? c. The industry's demand curve is ?? = 48,000 − 60?. How many firms are in the I ndustry?
d. If the industry demand decreases to ?? = 30,000 − 80? how will the industry respond?
a) Describe the factors that drive profits to zero in perfectly competitive markets in the long run. Explain
carefully the incentives that drive the market to a long run equilibrium.
b) Why would a firm choose to operate at a loss in the short run? Explain carefully.
c) When do firms decide to shut down production in the short run? Explain carefully.
Chapter 8 Solutions
Micro Economics For Today
Ch. 8.5 - Prob. 1YTECh. 8.5 - Prob. 2YTECh. 8 - Prob. 1SQPCh. 8 - Prob. 2SQPCh. 8 - Prob. 3SQPCh. 8 - Prob. 4SQPCh. 8 - Prob. 5SQPCh. 8 - Prob. 6SQPCh. 8 - Prob. 7SQPCh. 8 - Prob. 8SQP
Ch. 8 - Prob. 9SQPCh. 8 - Prob. 10SQPCh. 8 - Prob. 11SQPCh. 8 - Prob. 12SQPCh. 8 - Prob. 1SQCh. 8 - Prob. 2SQCh. 8 - Prob. 3SQCh. 8 - Prob. 4SQCh. 8 - Prob. 5SQCh. 8 - Prob. 6SQCh. 8 - Prob. 7SQCh. 8 - Prob. 8SQCh. 8 - Prob. 9SQCh. 8 - Prob. 10SQCh. 8 - Prob. 11SQCh. 8 - Prob. 12SQCh. 8 - Prob. 13SQCh. 8 - Prob. 14SQCh. 8 - Prob. 15SQCh. 8 - Prob. 16SQCh. 8 - Prob. 17SQCh. 8 - Prob. 18SQCh. 8 - Prob. 19SQCh. 8 - Prob. 20SQ
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