question
The industry of good X is cost-constant. At first, the market demand function is Q = 1000 - 15P and the industry is at the long run equilibrium, with each firm producing 30 units and the price of X is P = 20. There is an increase in the demand, that is now Q = 1200 - 15P. What is the price of X at the new long run equilibrium?
answer
20
question
A decreasing-cost industry has a downward-sloping
answer
long-run industry supply curve.
question
Firm A is one of the firms in the long run equilibrium of the competitive industry of good X. The market demand function is Q = 1200 - 7PX. Firm A's total revenue is 350 and PX = 70. How many firms are there in this industry at equilibrium? (Note this number doesn't have to be integer.)
answer
142
question
In long-run competitive equilibrium, a firm that owns factors of production will have an
answer
economic profit = $0 and accounting profit > $0.
question
Each firm in an industry has long run cost function C = 2q3 - 30q2 + 180q. The market demand function of this industry Q = 150 - 2P. What is the quantity that each firm produces in the long run Equilibrium?
answer
7.5
question
Each firm in an industry has long run cost function C = 0.5q3 - 25q2 + 430q. The market demand function of this industry Q = 1000 - 3.5P. What is the quantity (level of production) that each firm produces in the long run Equilibrium?
answer
25
question
Consider the following statements when answering this question
I. In the long run, if a firm wants to remain in a competitive industry, then it needs to own resources that are in limited supply.
II. In this competitive market our firm's long-run survival depends only on the efficiency of our production process.
I. In the long run, if a firm wants to remain in a competitive industry, then it needs to own resources that are in limited supply.
II. In this competitive market our firm's long-run survival depends only on the efficiency of our production process.
answer
I is false, and II is true.
question
Refer to Figure 8.2. If the firm expects $80 to be the long-run price, how many units of output will it plan to produce in the long run?
answer
64
question
Each firm in an industry has long run cost function C = 0.25q3 - 10q2 + 150q. The market demand function of this industry Q = 520 - 3P. What is the equilibrium number of firms in this industry? (Note this number doesn't have to be integer.)
answer
18.5
question
Firm A is one of the firms in the long run equilibrium of the competitive industry of good X. The market demand function is Q = 700 - 20PX. Firm A's total revenue is 570 and PX = 19. How many firms are there in this industry at equilibrium? (Note this number doesn't have to be integer.)
answer
10.6667
question
If there are no barriers to entry into an industry,
answer
long-run economic profits must be zero.
question
Firm A is one of the firms in the long run equilibrium of the competitive industry of good X. The market demand function is Q = 150 - 3.7P. Firm A produces 15 units of good X and its marginal cost is 25. What is Firm A's total revenue?
answer
375
question
What happens in a perfectly competitive industry when economic profit is greater than zero?
A) There may be pressure on prices to fall.
B) New firms may enter the industry.
C) Existing firms may get larger.
D) Firms may move along their LRAC curves to new outputs.
E) All of the above may occur.
A) There may be pressure on prices to fall.
B) New firms may enter the industry.
C) Existing firms may get larger.
D) Firms may move along their LRAC curves to new outputs.
E) All of the above may occur.
answer
E) All of the above may occur.
question
1) Consider the following statements when answering this question
I. If the cost of producing each unit of output falls $5, then the short-run market price falls $5.
II. If the cost of producing each unit of output falls $5, then the long-run market price falls $5.
I. If the cost of producing each unit of output falls $5, then the short-run market price falls $5.
II. If the cost of producing each unit of output falls $5, then the long-run market price falls $5.
answer
I is false, and II is true.
question
2) Consider the following statements when answering this question
I. Increases in the demand for a good, which is produced by a competitive industry, will raise the short-run market price.
II. Increases in the demand for a good, which is produced by a competitive industry, will raise the long-run market price
I. Increases in the demand for a good, which is produced by a competitive industry, will raise the short-run market price.
II. Increases in the demand for a good, which is produced by a competitive industry, will raise the long-run market price
answer
I is true, and II is false.
question
3) Each firm in an industry has long run cost function C = 0.25q3 - 10q2 + 150q. The market demand function of this industry Q = 150 - 2P. What is the quantity (level of production) that each firm produces in the long run Equilibrium?
answer
20
question
4) Each firm in an industry has long run cost function C = 0.5q3 - 25q2 + 430q. The market demand function of this industry Q = 1000 - 3.5P. What is the equilibrium number of firms in this industry? (Note this number doesn't have to be integer.)
answer
23.55
question
5) Each firm in an industry has long run cost function C = 2q3 - 30q2 + 180q. The market demand function of this industry Q = 150 - 2P. What is the long run Price of Equilibrium?
answer
67.5
question
6) Refer to Figure 8.2. At P = $80, the profit-maximizing output in the short run is
answer
39
question
7) Firm A is one of the firms in the long run equilibrium of the competitive industry of good X. What is Firm A's profit?
answer
0
question
8) In a constant-cost industry, an increase in demand will be followed by
answer
an increase in supply that will bring price down to the level it was before the demand shift.
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